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$9,580,000,000 Pours Into US Bond Funds As Global Markets Anticipate Imminent Federal Reserve Rate Cuts: Report

August 31, 2024

Investors are pouring capital into US and global bond funds in anticipation of rate cuts from the Federal Reserve.

In the week ending August 28th, a total of $17.69 billion in global bond funds was purchased, with $9.58 billion allocated to US bond funds, reports Reuters, citing LSEG data.

The numbers represent a six week high and come as investors bet that Federal Reserve Chair Jerome Powell will lower interest rates in the months ahead.

In the US, investors directed $5.42 billion specifically toward US government bonds – the largest allocation since October of last year.

Meanwhile, gold and money markets are maintaining their popularity.

Money markets witnessed $8.18 billion in global inflows, marking four positive weeks in a row.

Gold and other precious metal funds saw $342 million in net inflows, marking three consecutive weeks of gains.

The moves happened as the US stock market declined by about $2.83 billion in the same week.

Meanwhile, real-time data shows Bitcoin ETFs witnessed $277.2 million in outflows over the last five days.

The CME’s FedWatch tool shows 30% of market participants now expect the Federal Reserve to implement a 50 basis points rate cut next month, with 70% expecting a quarter-point cut.

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