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Bond Market Set for More Tumult With Fed’s Next Move in Limbo

  • Quarter-point March hike is most likely scenario at this stage
  • Anxiety is running high as traders also await Fed’s dot plot
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Bond investors battered by the wildest swings in decades are hunkering down for their next big test: navigating the Federal Reserve’s response to the mounting financial instability that threatens to derail its fight against inflation.

No matter what the central bank does, investors face more pain after volatility surged to levels not seen since the 2008 financial crisis. The recent plunge in Treasury yields and the abrupt recalibration in Fed rate bets are signaling one more 25 basis-point hike is the most likely scenario at this stage. Now what’s getting Wall Street really anxious is what officials will do after that.