UBS remarks on the Federal Open Market Committee (FOMC) minutes. UBS assess that rate cuts will have to come sooner than the Fed is telling us.
UBS also remarks on three-year-olds trading Treasuries:
- Central bankers keep stressing rates will stay high—the Federal Reserve minutes signalled much the same message.
- Markets are not paying attention. There is a sense that central bankers are trying to manipulate the bond market vigilantes—but bond traders are like three-year olds at a party who are high on sugar and will not be controlled.
- Investors are increasingly looking at the disinflationary details of advanced economy consumer prices and speculating on rate cuts having to come sooner.
