Bond Market Looks to Inflation Data to Back Steeper Yield Curve
Personal income and spending data for February will be released Friday.
Photographer: David Paul Morris/BloombergThis article is for subscribers only.
Bond investors are driving a wedge into the Treasury market in anticipation of slower economic growth and faster inflation, spurring demand for shorter-term Treasuries at ever-lower yields while longer-term yields drift higher. The next test comes with Friday data expected to show inflation remains elevated.
Five-year yields fell eight basis points last week, breaching 4% after Federal Reserve policymakers lowered their forecasts for US economic growth, bolstering wagers on interest-rate cuts this year. As 30-year bond yields climbed on Friday, they exceeded five-year yields by nearly 60 basis points, the widest margin since September.