Markets on tenterhooks as inflation fears overtake recovery hopes

Trajectory would hinge on Street's perceived inflation forecasts

The markets are expected to remain volatile because a spike in US bond yields is likely to trigger a flight to safety among investors. 

Last week, the yield on the 10-year US Treasury rose to as much as 1.61 per cent, which sent shockwaves through global equity markets. The Sensex and the Nifty plunged nearly 4 per cent on Friday.

What could give comfort to investors is that the US yields have cooled to 1.41 per cent, although they still remain high, compared with 1.08 per cent a month ago.

Also, the House passing US President Joe Biden’s $1.9-trillion Covid relief bill could