The bond market is sending a more urgent recession warning and also signaling that the Federal Reserve may have to pause raising interest rates — giving up its fight against inflation. The failure of Silicon Valley Bank and worries about broader contagion shook the bond market and sent rates tumbling. The 2-year Treasury yield fell about 100 basis points since Wednesday, its biggest three-day move since the stock market crash in October 1987. A basis point equals 0.01 of a percentage point.
10Y2YS 1Y mountain yield curve Economist Ed Hyman, chairman of Evercore ISI, said in a note that it would be a good idea for the Fed to pause its hiking because of the financial shock from the bank failures. Gundlach said he still expects the Fed to raise the fed funds rate range by a quarter point on March 22, but he said that could be the final hike. "This is really throwing a wrench into Jay Powell's game plan...
Let the fun begin
The economy is strong as hell, Jack!