The market estimates only about a one-third probability of a 25 basis point rate cut this year; investors may face even greater challenges next month.

Golden Ten Data reported on April 10 that, after data showed gasoline prices rising due to the Iran war and US March inflation accelerating, bond traders slightly scaled back their bets that the Federal Reserve will cut rates once this year. Pricing in the rate swaps market on Friday indicated the probability of a 25 basis point Fed rate cut in 2024 is about one-third, little changed from before the data release. Following the report, US Treasuries edged lower and yields across maturities rose by two to three basis points. Tom di Galoma, Managing Director at Mischler Financial Group, said: “Today’s CPI data will not support bond prices, as next month’s inflation report will bring more trouble for investors and the Federal Reserve.”