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The Weekly Fix: Fed Catching Up to Curve Means Smashing It Flat

Jerome Powell, chairman of the U.S. Federal Reserve, during a Senate Banking, Housing, and Urban Affairs Committee confirmation hearing in Washington, D.C., U.S., on Tuesday, Jan. 11, 2022. Powell said the central bank will prevent higher inflation from becoming entrenched while cautioning that the post-pandemic economy might look different than the previous expansion.
Jerome Powell, chairman of the U.S. Federal Reserve, during a Senate Banking, Housing, and Urban Affairs Committee confirmation hearing in Washington, D.C., U.S., on Tuesday, Jan. 11, 2022. Powell said the central bank will prevent higher inflation from becoming entrenched while cautioning that the post-pandemic economy might look different than the previous expansion.Photographer: Graeme Jennings/Washington Examiner

Welcome to the Weekly Fix, the newsletter where flat is the new black. I’m Bloomberg’s chief rates correspondent for Asia, Garfield Reynolds.

Federal Reserve Chairman Jerome Powell’s post-meeting presser this week transformed debt markets once again -- JPMorgan Chase & Co.’s chief economist called his remarks “arguably the most hawkish he’s made” since taking over at the head of the U.S. central bank. The response at the short end was brutal, but far from transitory.