The results of the $44 billion sale of seven-year notes are out and this one was a bit better with only a 0.3 bps tail after tails of 2.0 bps and 1.3 bps in sales of 2s and 5s earlier in the week. It's not a pretty one though in the bond market with 2s up 8.8 jbps today to 3.97%, which could be the highest close since June (despite 75 bps in Fed easing).
The market is starting to price in rate hikes on a prolonged energy shock that bleeds into inflation. The curve now shows a 50% chance of a hike in October.
