Daily Market Color October 14, 2022PM Truss’ Firing of Finance Minister Kwasi Kwarteng Creates Volatile Session Overseas UK yields whipsaw in 50+ bp range as PM Truss backtrackson tax cuts. Swap rates and Treasury yields rose across a steepening curve, the 2-year yield rising ~3 bps to 4.50% and the 10-year yield rising ~8 bps to 4.02%. The volatility stateside was nothing compared to the price action in UK government bonds. Sparked by Liz Truss’ reversal of the 45-billion-pound tax cut, UK 30-year yields initially rallied 30 bps, but ended the day a full 50+ bps off the lows, the 30-year bond closing at 4.78%. Federal Reserve speakers double down on hawkishness. Federal Reserve speakers indicated that they are open to hiking rates much higher than planned. Kansas City Fed President Esther George said that the terminal rate may need to be increased to cool inflation. San Francisco Fed President Mary Daly said that though the economy is starting to cool, she’s “very supportive” of continuing to increase rates to restrictive levels. Week ahead. A relatively quiet week awaits, with housing starts and existing home sales data set for release on Wednesday and Thursday, respectively. There will be heavy commentary from the Fed on Thursday, including voters Philip Jefferson (neutral), Lisa Cook (dove), and Michelle Bowman (hawk).