Why January Fed Meeting Could Impact Bond Markets

The reopening of the US government on Tuesday, hawkish comments from the central banks of Europe and Japan, and President Trump’s “America is open for business” speech at the World Economic Conference in Davos, Switzerland, had little impact on the bond market. According to the latest COT (Commitment of Traders) report released on January 26 by the CFTC (Chicago Futures Trading Commission), speculators increased their short positions on the ten-year bond with net short positions increasing from 89,259 contracts to 117,877 contracts. The core PCE (personal consumption expenditures) inflation data could be import since the Fed prefers this measure of inflation when making interest rate decisions.