In addition to preparing for the possibility of raising interest rates twice in the next few months, traders also currently expect that the probability that the Federal Reserve will raise interest rates as soon as the next FOMC meeting to be held on September 16 will reach 50%. Ironically, Federal Reserve Chairman Kevin Walsh's more hawkish tone on Friday successfully pushed market interest rate expectations back to roughly the same level as after the July 29 press conference, when short-term yields fell. Prior to Walsh's speech, the SOFR futures yield was basically flat on the same day; currently, it has risen at most by about 6.5 basis points. The yield on longer-term bonds appears to have recovered most of its previous decline, while the impact of Walsh's hawkish tone is even more evident in the dollar market. EUR/USD fell to 1.16, the Mexican peso returned to around 17 pesos per dollar, and the yen approached 160 yen per dollar.

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