Federal Reserve officials are facing increased uncertainty regarding interest rate policy due to persistent inflation concerns, making them hesitant to implement further cuts. This uncertainty has led to a relatively narrow range in U.S. Treasury yields, as traders remain cautious and await new market catalysts that could significantly shift pricing. [
Michael Lorizio, Head of U.S. Rates and Mortgage Trading at Manulife Investment Management, highlights the challenge presented by the lack of clear economic guidance from top-tier data sources, making it difficult to accurately assess the current state of the U.S. economy before new information becomes available.
] The release of the Federal Reserve’s October meeting minutes is expected to shed light on how many policymakers might oppose a rate cut in December. “With previously varied opinions prevalent regarding future policy actions, the upcoming minutes may provide more clarity and shape market expectations for the upcoming decision on interest rates at the December meeting,” notes Lorizio.