Markets now price an 80% chance of a September Fed rate hike after hawkish signals and a revised dot plot.
Markets repriced Fed policy expectations sharply after hawkish commentary and an updated dot plot, fully pricing a rate hike by October. The probability of a September move jumped from 36% to 80%, with 38bps of tightening now expected by year-end.
Two-year Treasury yields surged 13.1bps to a 15-month high of 4.19%, marking their largest increase in over a year. The 10-year yield rose 4.9bps, while the 30-year yield edged 1.2bps lower. The Dollar Index gained 0.55%, supported by broad G10 currency weakness.
Risk assets faced pressure, with gold dropping 1.71% and Bitcoin falling 2.15% amid the rates repricing.