Bond market prices in Fed U-turn as recession risks rise

The Federal Reserve has made clear it wants to raise interest rates to lower inflation without triggering large-scale job losses.

But a rally in the bond market this week shows investors doubting the Fed’s ability to thread this needle.

Friday’s trading session extended a week of falling yields as investors snatched up bonds; yields on the U.S. 2-year and 5-year Treasuries both finished the week roughly 0.30% lower than they ended the prior week.

The yield on U.S. 10-year Treasury notes…

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