The bull market in interest rates (the bear market in bonds) gathers steams. From Wolf Richter at wolfstreet.com:
Yields and rate-hike expectations spike. A rate hike now?
The probability of a 50 basis-point hike at the FOMC meeting on March 16 spiked to 90% this afternoon, based on CME 30-Day Fed Fund futures prices, after this morning’s hair-raising inflation data for January, and after St. Louis Fed President Bullard’s talk on Bloomberg. The spike in inflation is now infesting services and has spread deep and wide into the economy. A 50-basis-point hike would bring the Fed’s target range for the federal funds rate to range between .50% and 0.75% (Fed Rate Hike Monitor via Investing.com):
“There was a time when the Committee would have reacted to something like this [the hair-raising inflation report] with having a meeting right now and doing a 25 basis points right now,” said Bullard, formerly biggest dove in the house. “I think we should be nimble and considering that kind of thing,” he said.
“I don’t think this is shock-and-awe,” Bullard said about the 50-basis point hike, as markets are already pricing it in. “I think it’s a sensible response to a surprise inflationary shock that we got in 2021 that we did not expect,” he said.
