Volatility in financial markets (especially bonds) rose in September. While markets continued to adjust their monetary policy expectations –reflecting the competing forces of persistent inflation and deteriorating economic activity –the UK government’s mini-budget was met with a severe market reaction. Yields on 10 year UK gilts rise rapidly above 4% (the highest rates since 2008), forcing the Bank of England to intervene to safeguard pension funds and the government to reverse course on this policy. Global inflation remained stable at 8.7% yoy in August (unchanged since June). A range of factors –including slowing ... (full story)