(Bloomberg) -- Bond investors and rates traders are increasingly betting interest-rate cuts will start by the summer, challenging policymakers’ mantra of...
-- Bond investors and rates traders are increasingly betting interest-rate cuts will start by the summer, challenging policymakers’ mantra of high borrowing costs for the foreseeable future.Markets are now wagering that the Federal Reserve will cut rates for the first time in June, and will have enacted almost 100 basis points of reductions by the end of 2024. A similar amount of cuts is priced from the European Central Bank, potentially starting as soon as April.
ECB Executive Board member Christine Lagarde has pushed back, warning that any discussion of when to cut interest rates is “totally premature.” “Markets don’t believe the BOE would resist cutting rates if activity contracts or employment deteriorates, whatever the inflation backdrop,” said Axel Botte, head of markets strategy at Ostrum Asset Management in Paris.To be sure, some strategists say the market pricing has it wrong and investors have been too hasty switching their focus to cuts.
In Canada, the central bank’s decision to keep the possibility of another hike open was decried by Pimco’s former head of Canadian portfolio management, who argued policymakers should already be talking about cuts. VANCOUVER — The cost savings from recent layoffs at Telus Corp. will have a bigger impact on the company’s financial results in the coming quarters, Telus president and CEO Darren Entwistle said. "The incremental cost savings are expected to more meaningfully contributeto fourth quarter EBITDA, with the run rate expected to be felt by the second quarter of nextyear," he said on a call with analysts Friday.
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