Bond Market Seeks Clues on Fed Rate Path With March Hike a Lock
- Powell’s latest views on inflation, Fed projections seen key
- Yields rise with March 16 Fed liftoff priced in to market
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Bond traders are virtually certain the Federal Reserve will raise interest rates by a quarter percentage point on Wednesday. What they’re watching for is where the central bank is heading after that.
Two-year Treasury yields, which are highly sensitive to monetary policy changes, have already climbed to the highest since September 2019 with the central bank poised to begin a cycle of rate hikes to slow the steepest inflation surge in four decades. The jump in food and fuel prices since Russian’s invasion of Ukraine is adding to the price pressure, increasing speculation that the Fed in the next few months could follow next week’s move with a 50-basis-point hike -- something it hasn’t done since 2000.