Bond traders eye inflation for rate clues

Market watch: The Fed building in Washington. Dowding says the Fed will likely keep rates on hold this year, as inflation is expected to remain elevated. — AFP

NEW YORK: The temporary US-China trade truce dimmed the odds of a recession and sparked a sell-off in Treasuries, raising the stakes for investors ahead of the release of inflation figures for the world’s biggest economy.

With market-implied expectations for US Federal Reserve (Fed) interest-rate cuts receding and a multitrillion dollar tax package seen likely to worsen the US government budget deficit, focus is now on yesterday’s inflation data for any signs of a pickup in price pressures.