The Treasury Market and the Fed Won’t Get Sidetracked by an Inflation Surprise
- Treasury curve flattening persists after latest CPI report
- December rate hike ‘penciled in’ despite subdued price data
What a Flattening Yield Curve Signals About the Economy
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The dominant dynamic in the $14.2 trillion Treasury market can withstand whatever Wednesday’s inflation numbers say and whatever Fed speakers have to say about them.
Over the past year, the yield on two-year U.S. debt has marched nearly 70 basis points higher, compared to a paltry 12 basis point rise in its 10-year counterpart -- an intense so-called bear flattening of the yield curve.