Bonds continue to price in hikes
The bond market is having a rethink on inflation and interest rates today. US 2-year yields are up 4.5 basis points today to 0.40%. It's the highest since the start of the pandemic as the front end of the curve looks to make a move.
A September 2022 hike is now 80% priced in and every time a central banker expresses some doubt in the 'transitory' ethos, that ticks ever-so-higher.
This is a big mountain to climb but we'll get there eventually.
It's also a painful reminder that back in the 1980s, you could get one of these paying 16%. Before the financial crisis you could get 5-6%.
