Treasury Buyers Foreseeing September Rates Liftoff Flatten Curve
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Treasury investors are starting to believe in a September interest-rate increase again.
Futures show a 42 percent chance the Federal Reserve will raise borrowing costs during that month, up from 35 percent odds a week ago, as Greece’s bailout agreement clears one of the obstacles to higher rates. The extra yield 30-year bonds offer over two-year notes shrank to the narrowest in five weeks on Monday after St. Louis Fed President James Bullard said the central bank has to start “thinking ahead” about a shift away from ultra-accommodative policy. Shorter maturities are more sensitive to the outlook for monetary policy than longer ones.