Initial claims for unemployment benefits dropped to a two-month low last week, a sign of sustained labor-market strength ahead of Friday’s release of a nonfarm payroll report for August. U.S Treasury yields are rising, with the two-year touching its highest level since 2007. Mortgage rates are also climbing, reaching a two-month high. And the CME FedWatch Tool currently shows a 76% probability of a 75-basis-point rate hike when the Federal Open Market Committee meets later this month. At the same time, some data suggest the Fed’s efforts are having their intended effect – that inflation may indeed have been “transitory.” Darius Dale, the founder and CEO of 42 Macro, joins Real Vision’s Andreas Steno Larsen to talk about the yield market and the phases of the 2021-23 Fed reaction function. Darius thinks we’re in the third phase, where interest rates will stay higher for longer. So, what comes next?