The inversion in the curve was eliminated with the news from last week.
The bond market was driven by comments made by Fed members and the release of the minutes from the last FOMC meeting. The tone of the speeches made last week by five Fed governors was very hawkish. Strong indications of a 50-basis point increase in the Funds rate at the May FOMC meeting were offered in these speeches. Additionally, the minutes of the last FOMC meeting provided the outline of plans to shrink the size of the Fed’s balance sheet. The effort to remove liquidity appears to be about $95 billion per month or $1.2 trillion per year.
PROBANK AUSTIN ADVISOR - APRIL 11, 2022