This little-noticed bond-market development could put many borrowers on edge

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Big moves in stocks and cryptocurrencies have commanded the lion’s share of investors’ attention this week. But things are also unfolding in the bond market that could have major implications for borrowers this year.

A trading pattern known as a steepening of the Treasury yield curve gained momentum this week. If this dynamic remains in place by the time the Federal Reserve is ready to cut interest rates this year — or when traders solidify their expectations on the timing of such a move — it will likely be harder for consumers and businesses borrowing over a long-term horizon to enjoy the full benefits of lower short-term borrowing costs.

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