Bond Traders Step Up Bets the Fed Will Steer US Economy Into Recession
- Yield curve approaching recent inversion peak reached in March
- Bloomberg survey shows 61% see Fed hikes leading to recession
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Bond traders are stepping up wagers that the Federal Reserve will steer the US economy into a recession.
The market reaction to Wednesday’s revelation that Fed officials are prepared to raise interest rates by another half-point this year following the first pause in the central bank’s 15-month hiking campaign proves the point. Short-term yields climbed while long-term ones declined, anticipating a growth slowdown ahead. Likewise, a drop in yields on Thursday was led by long maturities.