The key take-away from yesterday's commentary is that Chair Powell is prepared to let inflation take off, and is unlikely to take action in the face of that, unless it gets out of control. The problem is we won’t know whether it is in or out of control until it allowed a bit of space. That’s quite an uncomfortable set of circumstances from the perspective of the fixed income investor, and especially for longer tenors, the value of which can get quickly eaten away by inflation. A move higher in long rates has been the impact reaction, and it would not surprise us if this was followed through with more rises in the ... (full story)