Fed's Hawkish Shadow Continues to Fuel Tumult in Bond Market

The bond market is expected to continue experiencing turbulence as economic uncertainty and the Federal Reserve's hawkish stance cast a shadow. Despite speculation that the Fed may be done raising interest rates, investors anticipate heightened volatility in US Treasuries, with some Fed officials suggesting that more rate hikes may be necessary. The rise in long-dated yields has been driven by the central bank's hawkish message, keeping uncertainty high. The bond market has been weighed down by increased debt sales and mounting deficits, resulting in minimal returns. Traders will closely watch the release of the minutes from the July FOMC meeting and the upcoming Jackson Hole gathering for further insights into the Fed's rate trajectory.