The bond market has lost its cool. And it’s not coming back any time soon.

The latest flip-out came earlier this summer, when one iffy jobs report from the US briefly opened the jaws of hell across all major asset classes. July’s non-farm payrolls report did clearly fall shy of expectations, with the US adding 114,000 jobs over the month, against expectations for 175,000. It was a big miss, making the argument that maybe US interest rates have been held too high for too long. But it was just one report, with some potentially problematic weather-related effects built in; and in any case, trying to predict payrolls accurately and consistently is a fool’s errand.

But government bond markets, and the suite of derivatives pegged to them that help investors hedge against or profit from moves in interest rates, nonetheless went bananas. At the peak of the summer shake-out, which has now mercifully passed, these markets were suggesting an expectation among investors that the US Federal Reserve might have to cut interest rates between meetings — an emergency step typically reserved only for the direst of crises like pandemics or financial stability shocks.