Bond yields rebounded after San Francisco Fed President Mary Daly said the central bank is “nowhere near” being almost done in fighting the hottest inflation in four decades. Chicago Fed President Charles Evans signaled that the central bank needs to keep raising rates next year to contain price pressures. Over the weekend, Minneapolis Fed President Neel Kashkari said that there’s “a long way away from” achieving the central bank’s target.

Eoin Treacy's view

PMI figures were surprisingly firm and that suggests the slowdown in the economy is not as pronounced as feared. That’s a signal to the Fed that the lagged effect of tightening policy has not yet been felt. They have no reason to stop tightening until they have clear evidence of an impact on growth and employment.