Following the Federal Reserve meeting, traders are flocking to stocks and Treasury ETFs in anticipation of a rate cut, which is expected to occur in June 2024.

Following the FOMC meeting, stocks and bonds in New York experienced a vigorous rally. Investors were reassured by Fed chair Jerome Powell’s remarks, which emphasized caution and considering financial conditions. The SPDR S&P 500 ETF Trust and the Invesco QQQ Trust both saw significant gains, while the iShares 20+ Year Treasury Bond ETF rallied further as Treasury yields dropped. The futures market for the Fed funds rate suggests a high likelihood of steady interest rates in December. The first rate cut is expected in June 2024, with additional cuts predicted in July and November. The two-year Treasury yield fell below 5% after the FOMC meeting, while long-term yields saw a substantial decline. Some investors caution against prematurely declaring an end to the bond market selloff. Hedge fund K2 Asset Management predicts 10-year Treasury yields will rise to 5%, while Franklin Templeton suggests they could peak at 5.25%. Bank of America anticipates another rate hike in December, contrary to market expectations. Investors are now awaiting the upcoming jobs report, with expectations for a decrease in non-farm payrolls.