I didn't know which it was (bated or baited), so I googled...

The correct phrase is "with bated breath," not "with baited breath." "Bated" means "reduced, restrained, or held," and "with bated breath" means to hold one's breath in anticipation or excitement. "Baited," on the other hand, means "lured with bait" or "taunted". (per google's AI)