Financial Times FT.com

Bond market raises doubts over Fed tactics

ByKrishna Guha in Washington

Published: February 26 2008 21:26 | Last updated: February 26 2008 23:40

Bond market concerns about inflation are threatening to undermine the Federal Reserve’s ability to stimulate the US economy by ­aggressively cutting interest rates.

Since the Fed cut interest rates by 125 basis points in January long-term interest rates in the bond market have gone up, not down, working to slow the economy rather than to boost it.

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