Yesterday’s selloff in U.S. rates – which continued this morning - was a reminder that the market should pay more attention to the Federal Reserve’s (the Fed) message rather than its own narratives/thought constructs. A barrage of hawkish statements from the Fed – which clearly prioritized fighting high inflation - added several basis points to the expectations for the Fed’s rate hike in September (now at 62bps), but, curiously, the market refuses to see more hikes beyond December (see chart below). Growth “fatigue” and a greater risk of recession is a major reason. The 2023 consensus forecast for the U.S. has been ... (full story)