The pendulum of market sentiment swings dramatically. It has swung from nearly everyone and their sister complaining that the Federal Reserve was lagging behind the surge in prices to fear of a recession. On June 15, at the conclusion of the last FOMC meeting, the swaps market priced in a 4.60% terminal Fed funds rate. That seemed like a stretch, given the headwinds the economy faces that include fiscal policy and an energy and food price shock on top of monetary policy tightening. It is now seen closer to 3.5%. It is lower now than it was on when the FOMC meeting concluded on May 4 with a 50 bp hike. In addition to ... (full story)