Treasury Bond Investors See Chances for Lower Rates Disappear By Michael McDonald Oct. 16 (Bloomberg) -- Treasury bond investors, who forecast lower interest rates two weeks ago, now see no chance the Federal Reserve will reduce borrowing costs until late next year as policy makers continue to warn about the threat of inflation. Interest-rate futures show traders expect the Fed to keep its target for overnight loans between banks at 5.25 percent. Fed funds futures traded on the Chicago Board of Trade projected 20 percent odds of a cut two weeks ago. Last month, the contracts suggested a 50 percent chance for lower rates.