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Stronger-than-expected U.S. inflation data for September has the bond market now considering the risk that the Federal Reserve may end up being forced to tighten interest rates into a stagnating economy with persistently higher price rises.Consumer price index readings have come in at 5% or higher on a year-over-year basis for five straight months, undermining the “transitory” theme put forward by central bankers. Bond traders reacted to Wednesday’s report by sending Treasury yields lower on maturities from seven years and out, causing the widely followed spread between two- and 10-year Treasury yields to narrow.Wednesday’s…
