Such was the concern about financial stability, that investors speculated the Fed would now be reluctant to rock the boat by lifting interest rates by a super-sized 50 basis points next week - and might not even hike at all.
The implied peak for rates came all the way down to 5.06%, from 5.69% last Wednesday, and markets were back to pricing in rate cuts by the end of the year. Such talk, combined with the shift to safety, saw yields on two-year Treasuries tumble a further 22 basis points to 4.36%, a world away from last week's 5.08% peak.
Longer-dated yields , however, climbed and the curve steepened as inflation remained a clear concern.
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