Analysis-Uncertainty over rate cuts wobbles US government bond market

Strong economic data and worries over sticky inflation are pushing investors to reassess how deeply the Federal Reserve will be able to cut interest rates this year, fueling weakness in the U.S. government bond market. The selloff comes amid a broad shift in sentiment on the timing and magnitude of expected rate cuts. Futures markets on Wednesday showed investors are betting the Fed will lower rates by 70 basis points this year, compared to the 150 basis points priced in at the beginning of 2024.