So James Bullard comes out with the simple truth that the economy is doing well enough to drive unemployment below 6% and inflation above 2%. So he jawbones the market on his projections for interest rate hikes. All well and good.
But the market has a problem with this, given that it is FrankenMarket (hey, it’s 10 years old; the hyperinflation view has changed, but its premise amazingly remains the same) and it was stitched together with inflation and nothing but more of the same will do. Anyway, in the face of Bullard the market has swung risk ‘OFF’ with yields ironically (I guess) dropping. The 10 to 2 year curve is up, with the 5′s messing around in the middle out of sync for whatever reason.
10, 5 & 2 year yields from Bloomberg
