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Compared to other central banks, the market's expectation of the Federal Reserve raising interest rates is not considered aggressive. Except for the European Central Bank, most other central banks are expected to raise interest rates at a faster pace.

Currently, US traders expect the Federal Reserve to raise interest rates by 25 basis points at its policy meeting in September next year. According to the pricing of interest rate swap markets, it is expected that the New Zealand Federal Reserve will have raised interest rates five times, the Bank of Canada three times, and the Bank of England four times by then.

However, there are also views that this prediction is overly biased towards hawks. In a report on Tuesday, strategists at Dao Ming Securities opposed the latest outlook for global policy and suggested investing long in Australian and UK short-term securities to "leverage short-term repricing".

The Federal Reserve of Australia is the first central bank to actively downplay market expectations. On Tuesday, it announced that it will increase the cost of short selling bonds maturing in April 2023 and 2024 to 100 basis points, strengthening control over the yield curve by increasing the cost of betting on interest rate hikes.

The Bank of England is the most prominent in the market where swap traders repriced to advance interest rate hikes. The hawkish changes at the short end of the UK bond curve are so significant that even though banks such as Morgan Stanley still suggest betting on a steeper Eurodollar through contracts expiring in December 2022 and December 2024- indicating that US interest rates continue to tighten, the equivalent UK short-term interest rate spread has been inverted, and pricing reflects expectations of interest rate cuts over the same period.