As we await the speech on Friday by Jay Powell at #jacksonhole on the state of the US economy, and maybe some further indication of the pace of #ratehikes from now till December, the market has been busy adjusting its expectations. As you can see in the chart below, on June 14th futures where expecting official rates to be at 3.69% by year end; a month ago, on July 28th, they were discounting 100 bps less than in June (2.64%), as the equity market was rebounding strongly from the June lows. Now, expectations have gone up again, and are discounting 3.4% as the market awaits the official communication from the #fed. The impact that short term rates volatility can have on other asset classes is huge.
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