The pressure on the long end continues
I tend to think this is more of a squeeze that will run into sellers at 2%.
The takeaway from Bullard today was hawkish but I'm not sure that's right. He said he wants to hike in late 2022 if inflation runs at 2.5-3.0% next year. That's a high bar considering that some base effects next year will unwind. For instance, used car prices should be lower a year from now than today.
In any case, do you really want to lose money (in real terms) in bonds for the next 18 months just for the chance of disinflation later?
