*The Fed has been looking for their cue to raise rates. Now that long end yields have moved up the Fed has an opening to raise Fed funds rates.
*Until they saw long end yields go up a Fed funds raise would risk a recession.
*Now the bond market lets the Fed off the hook that they can begin to raise.
*An important CPI number is out on Thursday.
*With a rate hike coming equities are at risk. The question is the Fed behind the curve? If so we'll need more hikes than planned which will drag equities.
The bond market has been trading off meaningfully. Still yields are much lower than historical norms. Now that long end yields have jumped the Fed has a window to raise rates without the fear that they'll cause the recession. Now with rising rates stocks have an added risk.
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