A Week of FedSpeak

Last week the Fed took a 'hawkish' turn, the dollar gained, and equities pulled back from the highs.

Longer-dated yields have plummeted since...

• 10Y yielded just under 1.6% pre-FOMC and hit 1.35% in Asia
• 30Y yielded just over 2.2% pre-FOMC and hit 1.93% in Asia

And cyclical bets have been smashed: The Nikkei dropped 3.3% overnight.

🔥🎯 20/20 hindsight analysis: the market was increasingly positioned one way. The speed of the move in bonds was almost certainly fuelled by an unwind of over-stretched positioning towards an inflationary outcome that was never truly on the cards.

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Tim Vollans

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