Powell's Words Soothe Bond Traders' Fears of Economic Downturn

Bond traders are dialing back bets on a deep downturn in the US economy, reflecting diminished expectations that the Federal Reserve's rate hikes will trigger a sharp recession. Even with policymakers seeing a chance for two more rate increases in the months ahead, the US economy is expected to hold up fairly well, unlike Europe's, which is showing signs of stalling. The bond market is finally getting in sync with Jerome Powell's outlook for the economy, and traders have scrapped once-aggressive wagers that the Federal Reserve chief would pivot to easing policy before the end of this year.