Treasuries Slump as Fed Dissents Spur Wagers on 2027 Rate Hike

Treasuries slumped, with two-year yields rising the most on a Federal Reserve decision day since 2022, as traders boosted bets the central bank may need to raise interest rates amid persistent inflation pressures.

US government debt declined broadly, but short tenors, most sensitive to expectations for Fed policy, led the post-Fed selloff. The losses in Treasuries kicked off earlier in the day as Middle East tensions and the continued blockade of the vital Strait of Hormuz spurred a rally in oil prices, adding to inflation concerns.