If wearing some green is all it takes, bonds would have escaped today pinch-free. Treasuries and MBS began the day with just a token amount of green (i.e. bond market improvement), but readily found more after inflation expectations hit record lows in the 10am Consumer Sentiment data.
To be fair to "token amounts," the rally felt fairly uninspired. Like yesterday, we would have liked to have seen a break below 2.48% in 10yr yields to signify stronger commitment to "the ceiling at 2.50%" in 10yr yields. Keep in mind, when we're considering the general notion of a long-term ceiling in Treasuries, we'll often be forced to sift through various bounces and breaks that merely "in the vicinity" of the ceiling. For instance, we're talking about a 2.50% ceiling even through we've seen yields over 2.60% this week. But the 2.50% is what we see if we take our glasses off and step way back from the long-term chart.
Next week brings quite a few Fed speakers, including the recently-hawkish Charles Evans on Monday, followed by Dudley (the big market mover from late Feb) on Tuesday. By the time we hear from Yellen on Wednesday, we'll have a clear sense of whether or not the Fed feels that markets took away the right message from this week's rate hike forecasts.
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