Bond market points to ebbing fears of tame US inflation

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Bond market points to ebbing fears of tame US inflation. The U.S. bond market's gauge on inflation expectations has rebounded from multiyear lows, but it remains below the Federal Reserve's target of 2 percent as the central bank is this week expected to take another step toward raising rates. The yield spreads between Treasury Inflation-Protected Securities and regular Treasuries, or TIPS inflation breakeven rates, have expanded since January. They reached their widest levels in over five months before narrowing after a surprisingly strong February payrolls report as well as fears that oil prices may resume their recent slide... It is unclear whether a recovery in this bond sector helps strengthen the case for Fed Chair Janet Yellen and other voting members of the Federal Open Market Committee to prepare for a rate hike as early as June... But there are other signals that support the notion that inflation may reach the Fed's target in the coming months. Read the full article: (VIEW LINK)


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