The yield on the 2-year Treasury note extended its rise Tuesday as expectations grew for the Federal Reserve to lift interest rates by 75 basis points, or three-quarters of a percentage point, when it concludes its policy meeting this week.
What yields are doing What’s driving the market Investors and economists have boosted expectations for the Fed to raise its benchmark interest rate by three-quarters of a point when policy makers conclude their meeting on Wednesday. Fed Chair Jerome Powell had previously said half percentage point moves were on the table for June and July after the Fed delivered a half-point rise in May.
The Wall Street Journal on Monday reported that recent inflation reports were likely to lead Federal Reserve officials to consider surprising markets with a 75 basis point move. Several economists had also penciled in the possibility of a 75 basis point hike after the May CPI reading. Meanwhile, the sharp rise in real, or inflation-adjusted, yields was blamed for adding to carnage in equity market, with major indexes plunging Monday and the S&P 500 SPX confirming its entry into a bear market.
Nothing stops/lowers the increase in price of oil, gas, food; inflation will remain high. To fight inflation, Fed will raise interest rate as much as the increase in inflation. High interest rates reduce earnings; hence, kill stocks, create Bear Market, recession. It'll get worse