US bond market focuses on Fed meeting, probability of interest rate cuts at year-end rises to 40%

As the situation in the Middle East pushes oil prices higher, U.S. Treasury market traders are closely watching this week's Federal Reserve meeting to assess officials 'views on the inflation outlook. The Federal Reserve is widely expected to keep interest rates unchanged on Wednesday, but traders tend to believe that interest rates will still be cut before the end of the year, with swap market data showing the probability of a rate cut before the end of the year rising to about 40%. Traders will listen carefully to Powell's speech at a post-meeting press conference to get an update on his plans after his term ends in May next year. At the same time, there will be a series of U.S. bond auctions this week to test market demand at current yield levels.