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U.S. Curve Steepens as Traders Test Fed Resolve on Inflation

  • Investors brace for more tightening from Federal Reserve
  • Yield curve steepens in rally ahead of U.S. inflation data
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Fed's Bostic on Rates Path, Market Volatility, Economy
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The U.S. yield curve steepened Monday amid a rush into the safest assets and uncertainty over how far the Federal Reserve will need to hike rates to stem inflation running at the fastest pace in 40 years.

The gap between two- and 30-year Treasury rates grew to the widest since mid-March as short-dated bonds lead the gains. Two-year notes -- the most sensitive to changes in policy -- rallied, pushing yields down to 2.57%, a 16-basis-point drop. Thirty-year yields slid 6 basis point to 3.16%.