Halister News

(Bloomberg) -- “With the greater-than-expected drop in the median fed funds forecasts, the front-end should continue to stay bid, and the market will find it harder in the near-term to get short, absent an indication of an imminent hike,” BMO strategist Aaron Kohli says in note.

• “Not only did Yellen seem not terribly concerned about the heating up of core inflation, she seemed to play down the strength in core that we have seen so far,” which “should favor steepeners for the time being once the impulse of the Fed’s dot-plot has passed”
• Other observations from strategist morning notes:
• CRT (David Ader): “Surprise tone from the Fed (as evidenced by the market’s reaction) won’t have a lasting impact because while they certainly diminished the hiking agenda’s pace, we see the change in fed funds projections as the Fed catching up with the market versus the other way around”
  • “Rates going into the Fed were at recent highs, suggesting the data had nothing to do with it”
• FTN (Jim Vogel): Rest of this month “will reward nimble investors who can catch the bond market leaning the wrong way”
• Marty Mitchell (independent): “Corrective oversold bounce in Treasuries that we have been expecting has now commenced after the 10yr traded to 2.00% and the Fed helped the buyers to establish the near-term floor there”