U.S. Bond Market Gives Notice It’s No Longer a One-Way Street
- Short-term yields meander as inflation puts Fed path in doubt
- Yield curve steepens, stoking alarm that a trend is reversing
The Marriner S. Eccles Federal Reserve building in Washington, D.C.
Photographer: Tom Brenner/BloombergThis article is for subscribers only.
Traders of U.S. government debt were dealt a stern reminder last week not to sleep on a market that’s been headed in one direction for a long time.
Yields had risen to the highest levels in years in anticipation of more Federal Reserve interest-rate hikes and the central bank beginning to shed Treasury notes and bonds from its balance sheet by not replacing them when they mature. For most of the first quarter, short-dated yields paced the move.