This was the week when central banks gave an inch on rate hikes, and investors took a mile. As far as markets are concerned, Pandora's box is open; the path to higher interest rates is set. Just look at the chart. One year from now, interest rates are priced more than half a percentage point higher than they were pre-war in both the US and the eurozone – and considerably higher still in the UK. Three hikes or more are priced from both the ECB and the Bank of England by year-end. {charts} That says as much about markets as it does central banks. Positioning and liquidity are exaggerating the story. My Rates Strategy ... (full story)