The Globe and Mail reports in its Wednesday edition that bond investors are expecting the U.S. Federal Reserve to keep interest rates steady this week, but signal that rate cuts are likely in the future. A Reuters dispatch to The Globe reports that as a result, bond investors are betting the U.S. Treasury yield curve will become less inverted and eventually return to a normal positive slope. The strategy involves making bullish bets on short-dated Treasuries and reducing exposure to longer-dated Treasuries, a trade referred to as a "steepener." This pushes yields on longer-dated Treasuries higher than short-term maturities. Investors are taking on more risk over a longer period in exchange for a higher yield. The two-year/10-year yield curve has been inverted for two years, marking the longest inversion in history, with the yield gap at minus 22 basis points. With the focus on the yield curve, the Fed is widely anticipated on Wednesday, at the end of its two-day policy meeting, to keep its benchmark overnight rate in the 5.25-per-cent to 5.5-per-cent range for an eighth straight meeting. Investors expect Mr. Powell to signal that rates will be lowered as soon as September for the first time in more than four years.