Economics
Fed Hike Bets Slump After Yield Curve Briefly Hits Four-Decade Extreme
- Yield declines pared after two Fed officials say job not done
- Half-point hike in September regains most-likely status
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Short-term Treasury yields dropped Wednesday after cooler-than-expected inflation data prompted traders to pare bets on the amount of tightening that the Federal Reserve is likely to do.
The bigger-than-expected deceleration in the growth rate of consumer prices re-established a half-point rate increase as the likeliest outcome of next month’s Fed meeting, as opposed to another three-quarter point hike. Even so, Treasury yields pared their initial declines as two central bank officials said rates hikes are likely to continue into next year.