Bonds

A closely-watched part of the U.S. yield curve inverted as Treasury futures volumes leaped on increasing concern that tighter policy will take a toll on growth.

The exchange market features some kind of assets such as enterprise asset-backed securities which aren’t traded on the interbank market.

Critics say that the central bank is moving in the right direction, but a 50 basis point interest rate hike was too restrained and a 75 bps move would have made better sense.

Stocks advanced after President Joe Biden signaled he’d reconsider China tariffs imposed by the Trump administration. The dollar and Treasuries retreated.

Yet prophecies of imminent stagflation are drowning out a countervailing consensus among savvy economists, who see the US growing through 2024 as inflation subsides to a third of its current 8.3% rate.

Treasuries gained for a second day as investors sought out the safest debt, driving the 10-year yield down 11 basis points to 2.77%, it’s lowest level since late April.

The move, if confirmed, may be the final straw in Russia’s debt saga after almost three months of war in Ukraine, pushing the country into its first foreign default in a century.

But in pouring cold water on the prospect for a jumbo-sized 75 basis point rate hike next month, he may have inadvertently set the stage for more turbulence going forward if inflationary pressures increase.

Jitters are everywhere after equities and bonds had their worst concerted monthly selloff since the global financial crisis while the dollar surged to a 20-year high.

Contracts on U.S. benchmarks were little changed and European shares struggled to hold onto earlier gains as investors shifted their attention to the monetary policy outlook.