Powell Needs You to Buy Bonds so the Fed Can Buy Time 

• Fed's actions and What is foreign exchange tradingprojections remain disconnected from each other
• Powell needs to make bonds attractive in order to keep the US economy going ahead
• Meanwhile, a bearish steepening has made it even harder for the Fed to pull off the ultimate balancing act

, I that the Fed was focusing its monetary policy on preventing the bond vigilantes from taking control of the rates market, thus spoiling the soft-landing party many (the Fed included) have been betting on.

reading in the bag and rising and food commodity prices, the game hasn’t changed, yet the stakes are certainly higher.

and the is currently running at levels that prompted investors to buy bonds in the past.

(BoJ) maintaining rates negative and the (BoE) leaving policy rates unchanged due to the positive surprise on the inflation front in the previous week.

and have also signaled that they are done.

:

were the fewest since January 2022. In stark contrast, mentions of recession have surged to their highest levels since at least 2018.

reaching its peak level since 2006, while the reached a level unseen since 2011.

has seen an increase of approximately 10 basis points, while the 5-30 curve has surged nearly 20 basis points.

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