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Bond Market Races Ahead of Fed by Most Since at Least the 1980s

  • Two-year yields rise faster, steeper than before prior cycles
  • Underscores shift from pandemic stimulus to inflation fight
Bloomberg business news
Markets Are Overpricing Fed: Morgan Stanley's Wilson
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Bond traders haven’t moved so swiftly to get ahead of the Federal Reserve in at least four decades, underscoring the dramatic tightening in financial conditions that has rippled across markets even before the central bank starts raising interest rates.

Yields on two-year Treasuries, which are highly sensitive to changes in monetary policy, have surged from 0.28% since the end of September to about 1.87% as traders prepare for the cycle of hikes that’s expected to begin Wednesday.