The Federal Reserve may cut interest rates more aggressively than markets expect, making shorter-maturity US Treasuries attractive, according to Pacific Investment Management Co’s Marc Seidner.
Seidner sees the Fed delivering two-quarter point reductions in 2025, potentially in the second half, with a chance of even more decreases after that. In contrast, swap pricing shows that traders expect fewer than two quarter-point cuts this year due to fears that a new round of US tariffs will stoke inflation.