By last Friday, rates had improved so much from recent highs that we were finally able to consider that 2022’s trend had shifted gears from “skyrocketing” to “sideways.” While that possibility can still be entertained, this week’s rates are definitely higher. Here’s how things look when we zoom in to just the past 6 weeks: Context is important. While these would be big swings during normal times, they are par for the course during 2022’s heightened volatility. In hoping for a shift to a sideways trend, we’re simply hoping to avoid breaking back above the peak seen at the beginning of May. Such an achievement will likely have a lot to do with economic data. 2022’s most closely-watched economic reports are those that pertain directly to inflation . In fact, for most of the year, the biggest reactions in rates have followed inflation reports and the policy response from the Fed. In the absence of any big ticket inflation reports this week, markets were forced to look elsewhere for inspiration. They found it over the weekend in overseas market developments. These included the lifting of covid lockdowns in China and record-setting inflation in the Eurozone. The holiday closure of U.S. bond markets on Monday made for an abrupt start to the week on Tuesday. The following day, bonds were spooked once again by a key report from the Institute for Supply Management (ISM) that showed stronger than expected growth in the manufacturing sector.