Markets Retreat as Threat Environment Worsens
Markets are dressed in red for all the wrong reasons this morning. Most major currencies are down against the dollar on a month- and year-to-date basis as increasingly-hawkish policy expectations intersect with safe-haven demand ahead of a likely shutdown of the US federal government. Ten-year Treasury yields are holding near a six-month high at 5.54 percent, North American equity futures are pointing to renewed losses at the open, and many measures of expected volatility remain elevated. The Federal Reserve’s preferred inflation measure continued its moderation in November, slightly depressing rate expectations for next year. Data released by the Bureau of...