A fixed income chart guide to today’s FOMC meeting
Senior Fixed Income Strategist
Summary: Find a chart pack to guide you through the major bond market's themes as the FOMC meeting unfolds.
Depending on the Federal Reserve’ economy outlook, Breakeven rates can be sensitive driving US Treasury yields higher.
The 5-year Breakeven rate continues to rise. If it breaks above 2.72%, it will record the highest inflation expectations since 2006, weighting on the curve’s belly. We might see another spike in 2s,10s,30s butterfly as it catches up with inflation expectations.
Finally, let’s not forget that tomorrow the US Treasury will issue 10 year TIPS and it will be important to understand whether investors seek protection against it after the FOMC meeting.