Bond Traders See Tipping Point Toward New Era of Higher Yields
View original at finance.yahoo.comBond Traders See Tipping Point Toward New Era of Higher Yields (Bloomberg) -- A new era of elevated borrowing costs is potentially underway as war-driven inflation angst intensifies in the US bond market, sending 30-year yields toward a two-decade high above 5%…
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Traders now see a Federal Reserve interest-rate hike as a lock by March, a dramatic reversal from late February 2026 when two quarter-point cuts were expected for the year.
60% confidencePrice action is concerning for two reasons: long-end rates are rising globally which tend to feed on each other, and the prospect of Fed hikes is coming into the market narrative.
60% confidenceHigher yields on long-term Treasuries, a benchmark for mortgage rates and corporate loans, are likely to reignite talk of growth risks from elevated oil prices.
60% confidenceThe Iran war has flipped the bond-market narrative on its head since late February, when two quarter-point cuts were expected for 2026.
60% confidenceThe interest rate range has moved higher and will remain elevated unless the Strait of Hormuz is opened.
60% confidenceThe primary worry is that expectations for hotter inflation are taking hold, which adds pressure on incoming Fed Chair Kevin Warsh and spoils bets that he will deliver rate cuts soon after taking the helm.
60% confidence
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