Market Briefing: Goldilocks Flees as Central Bank Bears Return Home
Markets are extending losses after a protracted August selloff. Hopes for a “soft landing” are fading as central bankers systematically lift terminal rate forecasts and rhetorically demolish odds on a 2023 policy pivot – pushing monetary policy expectations firmly into economically-restrictive territory. Ten-year yields are back at early-June levels, and the two-year Treasury briefly hit 3.5 percent for the first time since 2007 yesterday. Equity futures are down, energy commodities are dropping, and the dollar is grinding higher against its major rivals. The Japanese yen is knocking on levels not seen since 1998 as rising US yields diminish its attractiveness...