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Short-term Treasury yields spike on inflation
The discussion argued that rising short-term Treasury yields reflect market expectations of Fed rate hikes in response to persistent inflation, particularly from higher oil prices.
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The Callback
Fed's pause and reduced guidance steepen yield curve
34 weeks between these two statements.
The core thesis presented was that to meaningfully lower mortgage rates, the administration must first find ways to lower longer-term Treasury yields, as the transmission from Fed policy to the long end is imperfect.
The discussion argued that rising short-term Treasury yields reflect market expectations of Fed rate hikes in response to persistent inflation, particularly from higher oil prices.