From February until early April, the financial markets were screaming about the risk of the US recession, and the Fed was running out of options when it came to containing inflation without triggering a major systemic crisis. Both equity markets and bond trading desks were filled with dread, as volatility spiked and investors traded into wild swings in liquidity. The feared ‘triple squeeze’ that the markets had trouble pricing into asset valuations was expected to hit: the risk of recession in the US economy, the threat to the mid-term elections prospects of the Democratic Party, and the risk of a…

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