Bonds Show Inflation Outlook Falling to Lowest Level Since 2009
- Gauges near levels not `seen outside of times of crisis'
- Traders await speech by Fed Chair Yellen on Thursday
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The bond market’s inflation outlook for the next 10 years touched the lowest since May 2009, raising questions about the Federal Reserve’s ability to increase interest rates this year.
The 10-year break-even rate, a bond-market measure derived from the yield difference between Treasuries and inflation-linked bonds, showed consumer prices rising at an average pace of 1.48 percent during the next 10 years, well below the Fed’s target of 2 percent. The inflation measure preferred by Fed officials last reached that level in April 2012.