US Treasuries rallied ahead of a closely watched inflation reading that could cement bets on the size of the Federal Reserve’s interest-rate cut this month.

Bond traders are bracing for wilder market swings in the US than in Europe, as signs the world’s largest economy is faltering fuel bets on a jumbo interest-rate cut from the Federal Reserve.

Treasuries rallied along with global bonds, sending benchmark yields to multi-month lows, as traders bet the world is entering a new, disinflationary period by wagering on more interest-rate cuts next year.

Traders now have no doubt: the Federal Reserve will start raising interest rates once again next week.

US Treasuries headed for the strongest start to a year in more than two decades as investors scooped up government debt on wagers the Federal Reserve will further slow its pace of rate hikes as inflation cools.

The hottest US inflation in four decades will push the Federal Reserve to raise interest rates more aggressively this year, and a recession may not be far behind.

Signs are growing that U.S. Treasury yields may continue to march higher even if Federal Reserve Chair Jerome Powell strikes a balanced tone at Jackson Hole this week.

The real yield on 10-year Treasuries fell to a record low as concerns mounted over the outlook for economic growth even as investor flows fueled appetite for inflation-linked debt.

Cast a gaze across global bond markets and it’s a sea of calm. Yields are close to record lows, volatility is nowhere to be seen and central banks are still ploughing trillions of dollars into the economy to help foster a recovery.