The Circularity of the Fed's Logic

Key takeaways

Although the Fed continues to talk about the need to act to restrain higher inflation, elevated inflation did not seem to be driving yields higher.
The Fed’s Summary of Economic Projections suggests another rate hike is likely in 2026 and inflation does not return to target until 2029.
Long-term neutral rate expectations were revised higher.
Long-term yields moved higher likely because short-end rates are expected to rise.

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The Circularity of the Fed's Logic

INSIGHTS