Column: Markets more worried about Fed than inflation: McGeever
ORLANDO, Fla., Sept 28 (Reuters) – A look under the hood into what is driving the U.S. bond market sell-off since the Fed’s hawkish tilt last week suggests investors are pricing in higher interest rates more than higher inflation.
There’s been plenty of reason to worry about accelerating inflation and input prices all year. But for all the noise about a return to the 1970s and investors running fearful of price spikes, you would be in the red on any benchmark inflation hedges bought at the start of the year.
The trend was underlined over the past week.
The surge in longer-term yields and curve steepening since the Fed’s Sept. 22 meeting has been driven largely by rising “real” yields, while breakeven rates – a cleaner gauge of inflation expectations -…