The yield curve has moved up with larger increases in the long end.

The bond market continues to react to Chairman Powell’s comments including the Jackson Hole presentation. He said the Fed was willing to accept higher unemployment and even a decline in economic activity in order to tamp down inflation. They intend to continue to raise managed interest rates and shrink the size of their balance sheet to achieve that result. Investors had been expecting a softer, less hawkish stance that included a pause in removing accommodative monetary policy. This was driven by two quarters of negative Real GDP growth and much more modest inflation data from July. Chairman Powell said this was not enough to cause the Fed to pivot. The bond market has reacted by moving the term structure of interest rates up.