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The bond market’s gauge of future US inflation has risen to the highest level in 17 months, with Congress’ renewed pushed for federal aid to business, state, and local governments facing the second wave of coronavirus. 

As indicated by the US 10-year breakeven inflation rate, inflation expectations ticked higher to 1.81% on Tuesday, the highest level since July 23, according to data source Federal Reserve Bank of St. Louis. 

Yields on the regular 10- and 30-year treasuries spiked, with the latter rising over ten basis points to 1.683%, as investors priced in prospects of increased spending under Biden’s leadership. 

According to analysts quoted by Bloomberg, the bond market is playing catch-up with enthusiasm seen in the rest of the market. Equities gained ground last month as positive news on the coronavirus vaccine front triggered hopes for a swift global economic recovery.