The talk about 50 basis points from Fed chairman Jerome Powell along with the 7% jump in oil prices absolutely crushed bonds today, in what had started as a fairly quiet day.

Here's a look a the wreckage:

  • 2s +18 bps to 2.13%
  • 5s +19.5 bps to 2.33%
  • 10s +17 bps to 2.32%
  • 30s +13 bps to 2.55%

All of those are post-pandemic highs. Note that the curve flattened with 5s-10s now inverted to go along with a handful of other inversions in the curve. However I do want to point out the long end as 30s broke the March 2021 high of 2.52%.

30s monthly yield

The Fed ended its QE buying in the middle of this month and I find it awfully coincidental that we're getting such big moves. They're not totally out of play with re-investment still taking place but Powell gave strong hints that QT will start in May. I wonder if they start leaning in the other direction on the long end of the curve to keep some slope in the curve.