If there was a sliver lining for bulls in this week’s banking sector fireworks, it was that the rapid collapse of SVB materially reduced the risk of a Fed re-escalation.

During Senate testimony on Tuesday, Jerome Powell conceded that it was possible the Fed might find itself compelled (by the data) to return to a 50bps rate-hike cadence at least for one meeting. Traders took that as a nod in the direction of a half-point move at this month’s policy gathering.

Apparently fearing he’d led the market astray, Powell emphasized data dependence the following day while regaling House lawmakers, but by Friday afternoon on Wall Street, all that felt like a distant memory.

“As of March 8, the market was pricing in a terminal rate of 5.69% with 43bps of hikes in March, 35bps in May, 21bps in June and 9bps in July,” TD analysts including Priya Misra wrote Friday, on the way to briefly recapping how it all “changed dramatically” amid the SVB implosion and associated “contagion risk to the banking sector.”

Do take a moment to marvel at the pre- and post-SVB pricing as documented painstakingly in the tables above, from the same TD note.

The “Pre-SVB” column in the table shows prices as of March 8. The market nearly removed two quarter-point hikes and added 15bps of cuts to the 12-month, post-terminal trajectory since then. Two-year US yields were richer by 30bps on Friday, and nearly 50bps (!) since mid-week.

“With the contagion risk within the financial sector, we anticipate the bar for CPI to inspire a 50bps move is nearly prohibitively high,” BMO’s Ian Lyngen and Ben Jeffery said, referencing the March Fed meeting.

Bottom line: Between the cooler-than-anticipated MoM average hourly earnings print that accompanied the jobs report and the SVB drama, short-end yields and terminal pricing have collapsed. Albeit not as hard as an enfeebled VC lender.