- Odds for a 50-basis-point March Fed hike rise to almost 40%
- Two-year notes lead losses, yield heads for highest since 2019
U.S. Treasuries tumbled as the prospect of aggressive interest-rate hikes to cool inflation rippled through markets spooked by rising energy costs.
The decline was led by two-year notes — the most sensitive to changes in monetary policy — with the yield jumping toward its highest since 2019. Money markets rushed to place wagers on a faster pace of Fed tightening and raised the odds of an unusually large half-point increase in March to almost 40%, from as low as 13% on Monday.
James Hirai & Garfield Clinton Reynolds | Bloomberg