1-year treasury bonds and 1-year forwards

Interest rates are expected to rise, but at a slower pace:

Figure 1: Treasury one year (blue), one year ahead, one year (yellow), both in %. Source: Treasury via FRED and author’s calculations.

The extent to which rates are expected to be in one year from current rates in one year has declined. In other words, less gradual tightening than suggested a couple of weeks ago.