MARKET WRAP: Bonds recover some ground after big initial sell-off

The local bond market felt the heat on Tuesday as the US Federal Reserve’s unexpectedly hawkish tone on inflation spooked investors and led to a flood of selling.

Overnight comments by Fed chair Jerome Powell that the central bank was prepared to raise interest rates by half a percentage point at its next meeting if needed, saw the yield on the local benchmark R2030 bond jump as much as 20.5 basis points to 9.86% — the biggest increase since March 8 — before easing to 9.78% by the close of trade…