PDBC - Treasury Market Pricing

• The Fed's surprise 75 basis point hike last week blew Treasury yields out, with a small reversal at the end of the week. Such a reversal is typical after large moves.
• Risk-free rates are literally the simplest instrument to price in finance, and so the rates market ends up being closer to the theoretical ideal of “efficient markets”: rapidly changing price as new information comes in.
• The current rise in the 2-year rate was more rapid since the market pricing was wrong-footed from two directions: the terminal rate was rapidly revised higher, and the pace of rate hikes is double (or triple!) that of recent cycles.

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