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Yellen Will Meet 2% Inflation Goal Judging by Treasury Yields

  • U.S. yields show traders see 2% inflation over the next year
  • Rising oil removes a factor holding Fed back, Nomura says
Janet Yellen.

Janet Yellen.

Photographer: Andrew Harrer/Bloomberg
Updated on

The Treasury market is signaling inflation expectations are rising, and one metric shows traders anticipate price increases will reach Federal Reserve Chair Janet Yellen’s 2 percent target.

The difference between yields on one-year U.S. government securities and same-maturity Treasury Inflation Protected Securities, a gauge of trader expectations for consumer prices over the life of the debt, climbed to as high as 2.11 percentage points Tuesday. That was the highest in two years.