Soaring US Yields Set Stage for Fed’s ‘Hawkish Hold’
The dollar is trading near a five-month high after data showed US wage growth accelerating, further reducing market odds on rate cuts this year. Yesterday’s update in the Federal Reserve’s preferred measure of wage growth saw the Employment Cost Index accelerate to the fastest pace in a year, adding to last week’s inflation data in forcing markets to question whether the central bank will be able to lower interest rates from what it currently sees as restrictive levels. Two-year Treasury yields are holding above the 5 percent threshold and traders are now pricing in just a single rate cut in...