Bond Market Now Divided Over Whether Fed Will Even Lift in March
- Probability of Fed waiting until 2016 increases to about 70%
- Ten-year note yield marks lowest closing level since April
Central Banks and the Global Threat of Deflation
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First Treasuries traders were banking on September for the Federal Reserve to raise interest rates. Then they turned their focus to December. Now even March is looking like a toss-up.
The drumbeat of weaker-than-forecast global economic data continued Wednesday as September U.S. retail sales fell short of analysts’ expectations. The report came after Fed Governor Daniel Tarullo, who votes on rate decisions, said Tuesday that he doesn’t currently favor an increase in 2015, even though Chair Janet Yellen has said a move would probably be warranted. The Treasury sold four-week bills at a rate of zero percent Wednesday, reflecting investors’ demand for a haven.