U.S. Treasury Markets Signal Rising Inflation Expectations

Bond markets are pointing to an uptick in expectations for inflation in the U.S. in the years ahead. Break-even rates—the difference between regular- and inflation-protected Treasury yields—have crept up in September, with the five-year reaching 2.25% this week. Investors are eyeing a further rise in oil prices, lifted by Saudi Arabia's extension of its production cut through to the end of the year, and considering its impact on inflation and interest rate policy.