Two-year Treasury yields gain ground after IMF backs up the U.S. central bank's determination to stay higher for longer in order to suppress inflation.
Bond yields rose on Thursday as investors increased bets on a 50 basis point rate hike at the the next Fed meeting.
What’s happening What’s driving markets The International Monetary Fund has backed up the Federal Reserve’s hawkish stance, with Gita Gopinath, the Fund’s second-in-command, telling the Financial Times that U.S. inflation had “not turned the corner yet” and the central bank should “stay the course” in its battle to damp inflation.
For a number of weeks the chances of a 50 basis point hike had been priced at around 26%, so the shift higher points to traders becoming more concerned that the Fed’s hawkish rhetoric may translate into a bigger rate rise than previously thought.
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