Let’s check where we are with the US 10 year as we get into the FED meeting. Since Trump was inaugurated, red vertical line, yield has fallen by a relatively small amount, and would have fallen further if the FED hadn’t cut already.
A series of further cuts is priced in the market. Issuance is high, but continual bond buybacks are keeping yield from going up.
Trump has handed the FED an excuse to cut with the dodgy CPI numbers on Friday. Cutting into inflation 50% higher than your target is a very real policy error. And markets won’t be forgiving.