• Meanwhile in markets, a rather quiet start of the week, with US Treasury yields staying near Friday’s levels while Asian equities are up moderately as folks realize equities aren’t a bad place to be with current high and rising inflation rates.
  • At pixel time the 2y Treasury yield is at 2.47 while the 10y is at 2.41, which makes for a slightly inverted yield curve. In fact, the Treasury yield curve from 2y to 30y is fully albeit modestly inverted. Expect maturities shorter than 2y to rise above longer tenors too if the Fed follows through on rate hikes later this year as per forward/futures pricing. And speaking of rate hikes, if there is one reason why Fed-speakers are seemingly falling over each other in launching trial balloons for 50bps rate hike increments in the near future, it is real rates literally running away from the Fed, especially the real short rate as the chart below shows:

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