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.