Bond traders pull back on Fed cuts
Markets are increasingly pricing out a U.S. Federal Reserve rate cut this year after recent energy‑price moves lifted inflation expectations, with bond traders refocusing on ‘higher‑for‑longer’ scenarios. (bloomberg.com) That shift matters for banks on the calendar this week — M&T Bank is due to report Q1 results April 15 with analyst estimates at $4.00 EPS and $2.42 billion revenue after the bank announced a $5 billion buyback. (benzinga.com)
Bond traders have sharply scaled back bets on Federal Reserve rate cuts, pushing the market back toward a “higher for longer” view on U.S. interest rates. (bloomberg.com) The shift followed a jump in oil prices tied to renewed Middle East tensions, which investors say could feed through to gasoline and other consumer costs. Bloomberg reported on April 12 that Treasury traders were again focusing on inflation risk after a fragile United States-Iran ceasefire left energy markets unsettled. (bloomberg.com) The Federal Reserve held its benchmark rate at 3.5% to 3.75% on March 18 and said inflation “remains somewhat elevated.” In the same statement, the central bank said it would watch inflation pressures, inflation expectations, and developments in financial markets and abroad. (federalreserve.gov) Federal Reserve officials also signaled less room to ease this year. The median projection in the March 17-18 Summary of Economic Projections put the federal funds rate at 3.4% at the end of 2026, which implies one quarter-point cut from the current midpoint. (federalreserve.gov; usatoday.com) That repricing lands in the middle of bank earnings week, when investors will be listening for how lenders talk about loan demand, funding costs, and deposit pricing. M&T Bank said it will report first-quarter 2026 results before markets open on Wednesday, April 15, with a conference call at 8:00 a.m. Eastern time. (stocktitan.net) Wall Street’s current target for M&T’s quarter is about $4.01 a share in earnings on roughly $2.43 billion in revenue, according to MarketBeat’s consensus figures published ahead of the report. Benzinga separately cited analyst estimates of $4.00 a share and $2.42 billion in revenue. (marketbeat.com; benzinga.com) M&T also gave shareholders a fresh capital return signal before earnings. On March 30, the bank said its board authorized a new share repurchase program of up to $5.0 billion, replacing the prior $4.0 billion plan. (prnewswire.com) The bank entered this reporting season after a stronger 2025 than 2024. M&T reported full-year 2025 net income of $2.85 billion, or $17.00 a diluted share, in results released on January 16. (newsroom.mtb.com) If bond markets keep pushing rate-cut expectations further out, bank executives this week may face more questions about how long elevated borrowing costs can support margins without slowing credit growth. Wednesday’s M&T report will offer one of the first direct reads from a regional lender after that market turn. (bloomberg.com; stocktitan.net)
