Reuters Poll: Fed to cut rates twice this year, first in June under Powell

February 12 A Reuters survey finds long-dated U.S. Treasury yields will stay stable in the near term but rise later this year as inflation and Federal Reserve independence concerns mount. Short-dated yields, meanwhile, will edge lower on rate-cut bets. Nearly 60% of bond strategists (21 of 37) say large-scale U.S. Treasury issuance in the coming years to fund Trump’s tax cuts and spending plans will make it unfeasible for the Fed to shrink its $6.6 trillion balance sheet significantly. A separate Reuters survey shows the Fed is expected to cut interest rates twice later this year, with the first cut coming in June when Powell assumes the Fed chair role. The 2-year U.S. Treasury yield—sensitive to interest rate moves—is seen falling from its current 3.50% to 3.45% by end-April and 3.38% by end-July. The survey’s median forecast also sees the benchmark 10-year yield rising to 4.29% in 12 months, up from the prior month’s 4.20% prediction. (FX168)