Traders Slash Fed Bets After Data; Key Yield Inversion Deepens

(Bloomberg) — US short-term yields slumped Friday as slower-than-anticipated wage growth and an unexpectedly weak services-sector indicator prompted traders to trim expectations for just how high the Federal Reserve might push its overnight benchmark.

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The moves reversed the previous day’s bond-market selloff and came even as job growth and the unemployment rate for December were better than expected.

Most segments of the Treasury yield curve steepened as two- and…