Bond Yields Drop After Fed Comments But Seen Rising Again As Inflation Stays High

Bond yields plummeted this week after Fed officials said rate hikes were advancing policy aims, but many see recent gains as fragile.

Poor auction demand and expectations for higher rates signal yields will likely rise further to more normal levels.

Inflation data showed consumer prices remain high, challenging Treasury market and keeping pressure on yields.

Expanded Treasury borrowing is worrying at this late stage of the economic cycle and could add upward pressure.

Brief yield drops this week illuminated the risk of staying in cash instead of duration, but peak still unclear.