Goldman Sachs Asset Management’s Kay Haigh said an unambiguous hawkish message from a Fed official surprised markets by putting near-term inflation suppression first, prompting traders to pull forward rate‑hike bets. Market pricing now shows an >80% chance of a September Fed hike and implies more than one hike by October; as recently as Tuesday markets saw December as the earliest likely move. Haigh warned volatility in the two‑year Treasury will rise materially as markets refocus on inflation,

Goldman Sachs Asset Management’s Kay Haigh said an unambiguous hawkish message from a Fed official surprised markets by putting near-term inflation suppression first, prompting traders to pull forward rate‑hike bets. Market pricing now shows an >80% chance of a September Fed hike and implies more than one hike by October; as recently as Tuesday markets saw December as the earliest likely move. Haigh warned volatility in the two‑year Treasury will rise materially as markets refocus on inflation, the yield curve flattens with the long end stabilizing, and the Fed reduces forward guidance in favor of data‑dependence. Two‑year yields jumped sharply after the Fed decision and were choppy on Thursday; they rose 13bps on Wednesday — the biggest one‑day Fed‑meeting move since April 2025 and matching the largest single‑day Fed‑meeting increase since 2008. Thirty‑year yields hit a two‑month low on Thursday.