Bond Traders Brace for Inflation Data That Could Rattle the Fed
- This week’s CPI data is the last before Fed’s December meeting
- Morgan Stanley sees a risk that rate hike odds fall to 50%
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In the eyes of Morgan Stanley, bond traders would be wise to remember the 15th of November.
That’s when the Labor Department releases October inflation data, the final reading of the consumer price index before the Federal Open Market Committee begins its two-day meeting next month. Officials are widely expected to raise interest rates again, with the market pricing in a more than 80 percent probability of a December hike. Two-year Treasury yields are the highest since 2008 in anticipation of the move.