Bonds, US$ strength show investors expect interest rate hikes soon

New York

BEFORE last Friday, many investors opined that the US Federal Reserve would probably raise interest rates only once this year. Making the first hike in about nine years would be almost symbolic, as if the central bank was showing it still knew how.

Fewer investors are talking symbolism now after an unexpectedly strong February jobs report indicated the economy may be picking up steam. Dramatic moves in the bond market, along with gains in the US dollar, show that more investors are positioning for a series of rate increases in 2015, rather than a token move.