Treasuries Tumble as Fed Minutes Signal Chance of June Increase
- Two-year note yields reach highest level since March
- Traders expectations for rate rise next month climb to 30%
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Treasuries plunged, driving two-year yields to the highest since March, after minutes of the Federal Reserve’s April meeting showed policy makers considered an interest-rate increase in June appropriate if the economy continued to improve.
Yields soared across maturities as the market-implied probability of a rate hike next month jumped to 32 percent, from 4 percent Monday. Referring to the June meeting, officials “generally judged it appropriate to leave their policy options open and maintain the flexibility to make this decision” based on how the economy evolves, the minutes said.