Bond Yields Tumble as Traders Dial Back Fed Wagers: Markets Wrap
- Inflation cools again, giving Fed room to downshift on rates
- Fed’s Harker supports 25 basis-point hikes ‘going forward’
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Treasury yields slumped as inflation showed signs of easing, which could make the case for the Federal Reserve to slow its pace of rate hikes to prevent a harsher economic downturn. Stocks saw mild gains.
Wall Street looked past its initial disappointment with an in-line consumer price index to focus on the idea that aggressive monetary policy may be gradually achieving its desired results. That perception is visible in the swap market, which is showing less than 50 basis points of tightening priced in for the next two central bank gatherings: a small chance of no move at all in March.