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Treasuries Slump on Hawkish Fed Surprise as Inflation Angst Ebbs

  • Five-year notes lead declines as yield curve flattens
  • Market-based measures of inflation expectations tumble
Bloomberg business news
Fed's Hawkish News Positive for Bond Market, Minerd Says
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The Federal Reserve appears to have convinced the world’s biggest bond market that it’s ready to act to keep the U.S. economy from overheating if it needs to.

Treasury yields surged Wednesday -- led by maturities around the five-year area -- while measures of inflation expectations tumbled after policy makers surprised markets and signaled two quarter-point interest-rate hikes by the end of 2023. The central bank had previously projected rates would remain near zero through that year.