Expectations of Fed rate hikes are heating up, and the two-year U.S. Treasury yield has soared 19 basis points.

U.S. inflation surprised to the upside and hawkish Fed commentary intensified the debate over a 50-basis-point rate hike in December, with Logan arguing for at least that magnitude and Bowman and Schmid also signaling a hawkish stance. The two-year Treasury yield jumped 19 basis points in a single day as markets rapidly repriced the tightening path. The move matters because the front end of the curve is the most sensitive gauge of near-term policy expectations, and a sharp repricing signals investors are bracing for a faster or higher terminal rate. Watch the next inflation and labor data prints, along with Fed speakers, for confirmation of whether a half-point December move gains broader support.