Bond traders expect another interest rate cut by the Federal Reserve at its December meeting, but a surprise jump in inflation could upend their expectations. Treasuries rebounded on Friday after the jobs report showed the labor market cooling, making it more likely for the Fed to reduce interest rates again. The consumer- and producer-price reports, due this week, are expected to show little increase in inflation pressures, which would support the bond traders’ view of a rate cut.
Source: https://www.bloomberg.com/news/articles/2024-12-08/bond-traders-see-inflation-data-as-key-to-cinching-next-rate-cut