Fed comments yesterday sent the short end screaming lower as recent expectations for higher short term rates are proving to be too much too soon. The Fed has hinted at nothing but doing everything they can to stimulate growth in the economy, so one must question where the rate hiking expectations originated from. Regardless, the recent spike in short term Treasuries in anticipation of a Fed reversal was unjustified in our view and yesterday’s movement has brought all but brought us back to early June levels, (2-year was .95% on June 4).
Cliff Reynolds
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