While Federal Reserve policy makers have suggested an interest-rate increase is in the cards this year, their plans are facing renewed scrutiny from bond markets.

As stocks tumbled this week and oil fell below $40 a barrel for the first time since 2009, Treasurys investors saw the value of their holdings swell by $67 billion, the most since early July, according to Bank of America Merrill Lynch bond indexes. The appeal of government debt grew as declining commodity prices and tumbling inflation expectations suggest global demand is weakening.

Traders ratcheted back bets that the Fed will lift its target rate this year after minutes of the central bank’s July meeting showed officials discussed concerns about their ability to respond to disinflationary pressure from “international developments” and the risk of “premature policy tightening” as the benchmark rate remains near zero. The minutes disappointed traders who were looking for a clearer sign that a boost in borrowing costs was imminent.

“You have to talk about the Fed and the absence of any trigger-style warnings,” said Jim Vogel, head of interest-rate strategy at FTN Financial in Memphis, Tennessee. “That’s a critical reason why everything gets interpreted as supporting the Fed’s caution, and that’s in direct contrast to the thinking we had just last week.”

The U.S. 10-year yield fell 0.16 percentage point this week to 2.04 percent, according to Bloomberg Bond Trader data. The 2 percent security due in August 2025 rose almost 1 1/2 points in the period, or about $15 per $1,000 face amount, to 99 21/32.

2015 Rethink

Investors see a 34 percent chance that the Fed will raise interest rates at its September meeting, down from almost 50 percent at the start of the week, futures show. The probability of an increase at or before the Fed’s December session declined to about 60 percent from 74 percent Aug. 14.

The world has been adjusting to the prospect of policy makers in the U.S. and the U.K. raising interest rates while central banks throughout much of the rest of the world attempt to stimulate growth by adding accommodation.

China’s surprise devaluation this month may spur its exports by loosening the currency’s connection to the dollar. The greenback has gained 6.1 percent this year versus a basket of global currencies.

“There have been ripple effects already in anticipation of the Fed raising rates,” said James Kochan, chief fixed-income strategist at Wells Fargo Funds Management, which oversees $348 billion in Menomonee Falls, Wisconsin.

Dollar’s Role

The dollar’s strength this year contains inflation by making imports cheaper. Yet even with the nation’s jobless rate the lowest since 2008, economic growth has failed to drive up prices in the U.S.

Investors forecast an average inflation rate of 1.16 percent in the next five years, the lowest since January, data compiled by Bloomberg show. Wage growth in the U.S. has averaged 2.1 percent since the economy resumed its expansion in 2009, the slowest pace in any recovery since at least the 1960s.

“You almost question whether the Fed has a coherent basis to hike at all,” said Robert Tipp, chief investment strategist in Newark, New Jersey, for Prudential Financial’s fixed-income division, which oversees $533 billion. “If you didn’t know that they thought we were at full employment, you really wouldn’t see any signs of it.”