The 2-year Treasury is trading 93 basis points above the Fed Funds Rate — widest gap since November 2022.
Last time this happened, the Fed was way behind, still calling inflation transitory while markets screamed otherwise.
Now? Same story, different chapter. Markets are pricing in reality faster than the Fed is willing to admit it.
When bond markets lead by this much, it's not speculation — it's a warning. The curve is telling you the Fed miscalculated again, and they'll have to play catch-up.
Don't fight the bond market. It's been right more often than the Fed's dot plot.
Last time this happened, the Fed was way behind, still calling inflation transitory while markets screamed otherwise.
Now? Same story, different chapter. Markets are pricing in reality faster than the Fed is willing to admit it.
When bond markets lead by this much, it's not speculation — it's a warning. The curve is telling you the Fed miscalculated again, and they'll have to play catch-up.
Don't fight the bond market. It's been right more often than the Fed's dot plot.
