Weekly Commentary: Party Like It's 1999, 1996 And 2007

The rates market ended the week pricing a 95% probability of a 25 bps Fed rate hike over the next 11 months, signaling persistent expectations for tighter monetary policy. Semiconductor stocks posted their best start to a year since the dotcom bubble, underscoring strong momentum in the technology sector. The combination points to a risk-on tone for semis but a still hawkish backdrop for rates.

Analysis

The rates market ended the week pricing a 95% probability of a 25 bps Fed rate hike over the next 11 months, signaling persistent expectations for tighter monetary policy. Semiconductor stocks posted their best start to a year since the dotcom bubble, underscoring strong momentum in the technology sector. The combination points to a risk-on tone for semis but a still hawkish backdrop for rates.