Bond Market Just Flipped to “Rate Hike in July” as 2-Month Treasury Yield Spiked by 13 Basis Points

The 2-month Treasury yield spiked 13 basis points to 3.95%, indicating a potential rate hike at the July 28-29 FOMC meeting. This move suggests the bond market is pricing in a surprise rate hike. Fed Chair Warsh's decision to scuttle forward guidance has left markets to interpret data on their own.