The 3-month to 10-year spread flattened from +227 basis point to 0 and is now 112 basis points inverted, steepening in a negative (inverted) direction.
Anticipating where the 3-month yield will be in May is much easier than figuring out where the 10-year yield will be.
The Fed has penciled in quarter-point hikes in February and March with decent odds of yet another hike in May. The market agrees with that assessment.
Numerous Fed officials have repeated they will hike more than the market expects and stay there longer.
I don't doubt that unless something breaks in a major way. If the Fed gets in hikes in February and March, then the 3-month Treasury note will start inching towards 5 percent possibly as soon as April.
"Restoring price stability when inflation is high can require measures that are not popular in the short term as we raise interest rates to slow the economy," Powell said during a panel discussion hosted by the Swedish central bank Tuesday. "The absence of direct political control over our decisions allows us to take these necessary measures without considering short-term political factors."
has a lot to do with the money management techniques
I agree. You sometimes refer to this as back office activities, I think. I'm a believer in the power of that.I think he means, size of position, size of loss (controlled), rules around profit taking etc. AKA risk control. I know that can turn a system that only picks 50% winners into a good thing. You control losses or they control you.... everyone good I have listened to has some variation on that message and if not they eventually all seem to hit the wall like a crypto kid on acid.
I agree. You sometimes refer to this as back office activities, I think. I'm a believer in the power of that.