US bonds are waiting on the US inflation data and Fed testimony later this week. Still, the foundations have already been laid for a cautious, less dovish stance until the outlook under Trump becomes clear. It makes perfect sense, in our opinion, after three rate cuts last year, the last thing the Fed wants is to let inflation back out of the bag.
- We expect the US 2 years to trade below 4% in the coming months, but a less dovish Fed will likely limit any downside move.
MM is cautiously bullish on US Bonds (yields lower)
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