New York
A DAY after the Federal Reserve's third rate-hike in six months, fixed-income strategists digesting the bond market's signals are beginning to invoke the two words central bank officials dread: policy error.
Anticipated inflation is the root of their concern, after Wednesday's consumer price index (CPI) data missed estimates. Forward expectations for price growth gauged by CPI-linked Treasuries are sliding, the gap between short and long-term yields is the smallest in almost a year, and the overall shape of the curve implies traders see the 10-year yield at less than 3 per cent five years from now.
"The fact that the Fed is tightening against the backdrop of slowing inflation implies that...
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