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Barkin On Wanting Positive Real Rates Across The Curve

FED
  • Speaking to CNBC earlier, Richmond Fed’s Barkin (’24 voter) said he wants real rates in positive territory across the curve.
  • 10Y real yields have been positive since May and the 5Y since Jun 10 when the May CPI beat sparked rate hike expectations ahead of the Jun FOMC (although it did briefly turn negative after the Jul 27 FOMC).
  • Positive 2Y real yields are a much more recent development though, having briefly turned positive through mid-July, helped further by the Jun CPI beat, before cooling and then sinking further into negative after the Jul FOMC.
  • With 2Y real yields hovering around -30bps, Daly (’24 voter) kicked off a string of more hawkish Fedspeak on Aug 2 with talk of being nowhere near done, pushing them closer to zero before rising further with the ISM Services and particularly payrolls beats.

Treasury 2Y (white), 5Y (yellow) and 10Y (green) real yieldsSource: Bloomberg

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  • Speaking to CNBC earlier, Richmond Fed’s Barkin (’24 voter) said he wants real rates in positive territory across the curve.
  • 10Y real yields have been positive since May and the 5Y since Jun 10 when the May CPI beat sparked rate hike expectations ahead of the Jun FOMC (although it did briefly turn negative after the Jul 27 FOMC).
  • Positive 2Y real yields are a much more recent development though, having briefly turned positive through mid-July, helped further by the Jun CPI beat, before cooling and then sinking further into negative after the Jul FOMC.
  • With 2Y real yields hovering around -30bps, Daly (’24 voter) kicked off a string of more hawkish Fedspeak on Aug 2 with talk of being nowhere near done, pushing them closer to zero before rising further with the ISM Services and particularly payrolls beats.

Treasury 2Y (white), 5Y (yellow) and 10Y (green) real yieldsSource: Bloomberg