US Treasuries sank and bond traders increased their bets on a Federal Reserve interest-rate hike by October to 50% as concern that a protracted war in the Middle East could stoke global inflation.
A selloff in the $31 trillion market on Friday sent yields higher by 12 to 15 basis points across maturities after the Wall Street Journal reported that the US is sending three warships and more Marines to the region. Money markets no longer see any chance of a Fed rate cut this year, having fully priced in two quarter-point cuts before the US attacked Iran on Feb. 28.
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