Debt Ceiling Distractions

Year-end interest rate expectations are at their highest level since the March banking blow up

The headlines are full of stories about debt ceiling discussions and their impact on bonds and stocks. This is mostly noise. The news isn’t what may or may not happen at the Treasury but shifting expectations for what is coming from the Fed.

Key Takeaway: Year-end rate expectations are not yet back to their early March highs, but they have risen 50 basis points over the past two weeks and are more than 100 basis points higher than their post-SVB lows.