Bond-Market Reflation Trade Absorbs Punch to Extend 2021 Advance
- Tepid CPI report fails to derail bets on quicker inflation
- Breakeven rates enter abbreviated week at highest since 2014
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The reflation trade -- the darling of Treasuries investors betting on rebounding growth -- is proving resilient.
One of the hot wagers of 2021 barely lost a beat this week even after a surprisingly soft report on consumer prices. Long-term Treasury yields touched the highest in almost a year, market proxies of inflation expectations accelerated to the fastest pace since 2014 and the yield curve tested the steepest levels in more than five years.