Investors back off view that Fed could raise rates

Route change: A trader works on the floor of the New York Stock Exchange. Last month, investors were betting the Fed would raise rates in late 2022 and would offer clues about tapering its US$120mil monthly asset purchases as soon as next month. ─ AFP

NEW YORK: United States investors who had been betting the Federal Reserve (Fed) would raise rates as early as the end of next year abruptly retreated from those positions on Friday after a disappointing April employment report and now see the earliest the Fed might tighten roughly two years away.

The push-back in expectations for when the Fed might start raising rates also means any reduction in the pace of its bond buying – which the Fed has said will begin first – may also occur later than some investors had been betting.