Bond-fund managers at BlackRock Inc., PGIM, and other firms are sticking to trades that can pay off regardless of the Fed’s actions. The Treasury market saw its biggest annual gains since the pandemic, with the Fed cutting rates amid economic uncertainty. Focus on middle-maturity Treasuries and the 5-year range for strong performance.

The Fed’s rate cut was characterized as a “risk management cut” by Jerome Powell. The Fed is likely to cut rates further this year, with a focus on the belly of the yield curve. Positive carry and roll strategy offer protection from economic uncertainties, with the Fed’s rate forecasts showing a wide dispersion of views.

Some are unwinding pre-cut rally trades as the bond market remains uncertain. Market pricing may be more accurate than the Fed’s forecasts, with potential for further gains. Portfolio managers are advising clients to stay engaged in the bond market for potential upside.

Upcoming economic data and Fed calendar events to watch for further insights. Auction calendar includes various Treasury notes and bills for investors. Bond market remains uncertain but offers opportunities for investors to navigate changing economic conditions.

Read more at Yahoo Finance: Bond Traders Lean Into ‘Sweet Spot’ Amid Doubts About Fed’s Path