Macro update: Markets think fed tightening is almost over with just one more 25 bps rise as Powell loses credibility

Quick Take

• U.S. two-year yields set for the largest two-session drop since 1987, according to Zerohedge.
• Since last night, S&P futures have given up all their gains; contagion has further spread into the banking sector as Credit Suisse is down 10% to new lows, and the flight out to weak banks is just starting.
• Global bond yields have fallen worldwide; Japan’s 10-year yield dropped to 0.3% from 0.5% — while Germany’s two-year bond yield set for the largest drop on record.
• Markets believe U.S. central bank to raise just 25bps before cutting them later this year.
• The implied peak rate is down to 4.8% from an expected 5.7%

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