Скачать или смотреть Stock Rally Builds, US Yields Fall on Fed Wagers

Brian Belski, Chief Investment Strategist at BMO Capital Markets, joins to discuss his S&P target and why he remains extra bullish in the second half of 2025.

Wall Street traders kept piling into bets that the Federal Reserve will soon be able to cut interest rates, with stocks rising toward a record and bond yields falling alongside the dollar.
Just a day after a benign inflation report spurred a rally in equities, speculation grew that the Fed will reduce rates next month, with some wagers pointing to a jumbo-sized cut. Those expectations were also bolstered by Treasury Secretary Scott Bessent’s remarks that “we could go into a series of rate cuts here, starting with a 50 basis point rate cut in September.”
The S&P 500 extended an advance from its April lows to 30%. Treasury two-year yields, which are more sensitive to imminent policy moves, declined five basis points to 3.68%. The dollar fell against most major currencies.
Fed policymakers kept their benchmark at a target range of 4.25% to 4.5% at their last policy meeting. Bessent reiterated his view that, had officials been aware of the revised data on the labor market that were released two days after that gathering, they might have cut rates. That may have also been the case for the June meeting, he said.
“As the labor market continues to weaken, we think the US central bank will resume interest rate cuts next month, with 25-basis-point cuts at each meeting through January 2026 for a total of 100 basis points,” said Ulrike Hoffmann-Burchardi at UBS Global Wealth Management.
This backdrop of Fed easing is supportive of equities, quality bonds, and gold, she noted.
For weeks, investors have piled into swaps, options and outright Treasury longs to wager that subdued inflation will allow the Fed to lower borrowing costs in coming months. There’s some vindication for that view, with shorter-term yields dropping for a second day on Wednesday, while swaps traders lifted the odds of a September rate cut.
Following Tuesday’s CPI data, positioning shot higher across the the Secured Overnight Financing Rate (SOFR) futures complex as traders began to price in additional Fed easing over the coming 18 months.
Across equity, bond and currency markets, gauges of volatility are slumping to their lowest levels of the year. The Cboe Volatility Index — dubbed Wall Street’s fear gauge — hit its lowest since December.

As for stocks, Rich Mullen at Pallas Capital Advisors says that while he believes it still makes sense to stay invested, much of this year’s gains are likely already in.
“Inflation has been tame, and while many businesses have been able to avoid passing on higher costs to consumers, there are still questions on how much longer this trend can last,” he said.
Data this week showed underlying US inflation accelerated in July, but the cost of tariff-exposed goods didn’t rise as much as feared. A government report on producer prices due Thursday will offer insights on additional categories that feed directly into the Fed’s preferred price gauge — which is scheduled for later this month.
“Tariff-related costs are still being absorbed by corporate profit margins rather than passed on to consumers, giving the Fed room to pivot without sparking inflationary risk,” said Fawad Razaqzada at City Index. 
Some companies have been holding off on price increases for fear that consumers will pull back on spending, which will heighten interest for Friday reports on retail sales and consumer sentiment.

Across equity, bond and currency markets, gauges of volatility are slumping to their lowest levels of the year. The Cboe Volatility Index hit its lowest since December.
“Broadening participation in this bull market is essential for its sustainability,” said Craig Johnson at Piper Sandler. “We believe there is still room to run higher this summer, as the prevailing F.O.M.O. attitude among overly cautious investors and short-sellers helps drive prices higher.”
To Mark Hackett at Nationwide, the path of least resistance for the market is higher as the S&P 500 broke out of the recent trading range. 

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