(Reuters) Finally, the market looks to be buying into the Fed’s view on U.S. interest rates. And it’s a long time since that’s been the case.Hedge funds and speculators have swung sharply toward pricing in higher rates and yields at the short end of the curve, a sign that they are backing down and now think the Fed will stick to the pace and path of rate hikes it has long flagged. For most of the post-crisis decade, particularly since the “taper tantrum” in May 2013, financial markets have wagered that slow growth, low inflation and fragile markets will prevent the Fed from tightening policy much.
Hedge Funds Wake Up to Old Market Maxim – Don’t Fight The Fed
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