Bond market speculates Fed will cut rates

Winter could see lowered short-term funds rate

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The Federal Reserve is done, says the bond market, now convinced that the Fed’s next move will be to cut interest rates. Not soon — winter, maybe — but cut, and maybe a lot.

The clincher was this morning’s news that the unemployment rate rose from 4.6 percent to 4.8 percent in July, the highest since February, and a slim 113,000-job gain in July payrolls portends further increases in unemployment.