the bond market is signaling that the federal reserve will soon have to abruptly lift interest rates and that such a move could damage economic demand changes in bond yields suggest that this year’s surge in inflation has stuck around long enough to prompt the fed to increase interest rates more than once within the next year the yield on 2year treasury debt which reflects expectations for rates has risen to 07 from 046 since late october that implies a tightening of monetary policy that would make a dent in inflation