SAN FRANCISCO/NEW YORK—Federal Reserve policymakers continue to signal that gradual U.S. interest rate hikes will be enough to tame inflation despite a fast-growing economy, even as a jump in longer-term borrowing costs suggests investors may be increasingly nervous about that rosy scenario.
Yields on U.S. Treasuries jumped on Oct. 3, lifted by data showing strength in the U.S. job market and service sector. Investors, long skeptical that the Fed would be able to tighten policy as much as planned, seemed to come around as bets rose for two or even possibly three rate hikes in 2019.
