Reuters Survey: The Federal Reserve will cut interest rates twice this year, with the first in June when Powell takes over as Fed Chair

Mars Finance News: On February 12, a Reuters survey showed that long-term U.S. Treasury yields are expected to remain stable in the short term, but due to concerns over inflation and the Federal Reserve’s independence, they are likely to rise later in the year; short-term yields are expected to decline mildly due to expectations of rate cuts. Meanwhile, nearly 60% of bond strategists (21 out of 37) believe that the massive issuance of government bonds in the coming years to finance Trump’s tax cuts and spending plans will make it unfeasible for the Federal Reserve to significantly reduce its $6.6 trillion balance sheet. Another Reuters survey indicated that the Federal Reserve is expected to implement two rate cuts later this year, with the first in June when Powell takes over as Fed Chair. The yield on the 2-year U.S. Treasury, which is sensitive to interest rates, is expected to fall from the current 3.50% to 3.45% by the end of April and 3.38% by the end of July. The median forecast also shows that the benchmark 10-year U.S. Treasury yield is expected to rise to 4.29% in one year, up from the previous month’s forecast of 4.20%. (Jin10)