• The bond market is doubling down on the prospect of a US recession after Federal Reserve Chair Jerome Powell warned of a return to bigger interest-rate hikes to cool inflation and the economy.
• As derivative contracts referencing the next four Fed policy meetings repriced to levels consistent with the central bank benchmark rate rising by another full percentage point, the yield on the two-year Treasury note climbed as much as 13 basis points on Tuesday to 5.02%, its highest level since 2007. Critically though, longer-dated yields remained stalled; the 10- and 30-year rates ended little changed on the day under 4% despite auctions of those tenors later this week.