The two-year Treasury yield jumped above 2 percent, marking a rebound to a key psychological level last seen just as the U.S. sank into the depths of the financial crisis in September 2008.
The past 14 months have witnessed a remarkable reversal for the coupon maturity that’s most sensitive to Federal Reserve expectations. After failing to eclipse 1 percent through much of 2016, the yield surged following President Donald Trump’s election victory and kept climbing throughout 2017 as policy makers delivered on their promised three rate increases.
Data Friday showing that the underlying pace of U.S. inflation accelerated last month finally drove it above 2 percent, as the market-implied probability of a Fed rate increase in March exceeded 80 percent. Treasuries fell broadly, with the difference between yields on five- and 30-year maturities approaching the smallest since 2007.
Read more in Bloomberg.