Bond Bears Brace for Challenges From Consumer Prices, Auctions
- Surge in yields sparked by hot jobs report needs reinforcement
- Hawkish repricing of European bond markets abetted the selloff
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Bears in the U.S. Treasury market are on a roll, with yields across the curve at 2022 highs after a hot U.S. jobs report and long-term market rates in Europe above zero for the first time in years.
Whether those yields are justified will be tested next week. They reflect increased expectations for Federal Reserve rate hikes to keep high inflation from becoming entrenched as the economy recovers. Consumer price data for January, expected to show further acceleration to the highest level since the 1980s, could alter those expectations in either direction.