Bond Traders Await Powell Update, Slate of US Treasury Auctions

Traders in the US Treasury market are turning their focus to this week’s Federal Reserve meeting to gauge how officials are assessing the outlook for inflation as tensions in the Middle East keep oil prices elevated.

The central bank is widely expected to keep interest rates on hold Wednesday, although traders are leaning toward a cut by year-end. On Friday, swaps markets reflected around a 40% chance of a reduction by then, rising from about 20% after the Justice Department dropped its investigation into the Fed.