Treasuries steadied after a flight to havens sent yields lower, while traders dialed back the expected pace of Federal Reserve hikes. Money-market traders priced in about 135 basis points of rate increases over the central bank’s next three policy meetings, down from about 141 basis points at Monday’s close.

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New Zealand’s central bank raised interest rates by half a percentage point for a second straight meeting and forecast more aggressive hikes to come to tame inflation.

Investors are shifting their focus to slowing growth amid tighter monetary conditions to taper surging inflation, the war in Ukraine and China’s lockdowns that are chocking supply chains. Sales of new US homes fell more than expected in April, and the Richmond Fed’s measure of business activity fell to a two-year low. The Fed minutes from its last meeting out Wednesday may provide some clarity.

“If we are really at that point now where the Fed is delivering on what’s priced in, which is determinant on inflation not surprising further, we think that might start to cool some concerns about this continued repricing higher of Fed rates and of course the impact on growth,” Manpreet Gill, Standard Chartered Private Bank head of FICC investment strategy, said on Bloomberg Television. “That gives up a bit of room for optimism.”

Fed Bank of Atlanta President Raphael Bostic, who’s one of the central bank’s dovish policy makers, urged his colleagues to proceed with care. The Fed raised interest rates by 50 basis points earlier this month and Chair Jerome Powell signaled it was on track to make similar-sized moves at its meetings in June and July, a plan that both hawks and doves have since embraced to cool the hottest inflation since the 1980s. BM