The market will repeatedly test the resolve to control inflation, and until the real yields on 10-, 20-, and 30-year Treasuries fall, it is only suitable for agile trading.
This is because it is likely that CPI will come in favorable, pushing prices up; forward Treasury yields will rise and then pull back; rate hikes meet expectations and then rise further; when the market does not believe the Fed’s resolve, forward Treasury yields will rise again and then fall.
Over and over and over and over again—constant friction.
This is because it is likely that CPI will come in favorable, pushing prices up; forward Treasury yields will rise and then pull back; rate hikes meet expectations and then rise further; when the market does not believe the Fed’s resolve, forward Treasury yields will rise again and then fall.
Over and over and over and over again—constant friction.