Odds of Fed rate increase climb to highest since Sept. 21 meet New York’s Dudley urges caution in raising interest rates A Treasury market gauge of inflation expectations climbed to a four-month high as Federal Reserve Bank of Cleveland President Loretta Mester said that the economy is ready for higher interest rates. The difference between yields on 10-year notes and equivalent-maturity Treasury Inflation Protected Securities — known as the break-even rate — reached the highest level since May 19 at 1.64 percent Monday, as oil rose above $49 for the first time in almost three months. Mester said in a Bloomberg Television interview the same day that she expects inflation to move back toward the Fed’s 2 percent target over the next couple of years, and a “preemptive” rate hike would be appropriate. Traders assign 17 percent odds of Fed tightening at the November meeting, and a 61 percent […]