Bear Curve Steepening, Short End Resists Broader FI Selling

Tsys trading near midday lows after the bell, yield curves bear steepening (2s10s +6.188 at -82.828) with short end resisting broader selling in intermediates to long end.

• Brief risk-on in rates (while stocks continued to rally late) in response to dovish tones (favors 25bp hike in March .. maybe pause late summer) on otherwise balanced comments from Atlanta Fed Bostic (unscheduled conf call w/ reporters: “There is a case that could be made that we need to go higher" while "inflation is remaining stubborn at elevated levels, labor markets remain quite tight.
• Early technical buying after 2YY tapped 4.9414%, highest level since mid-2007, while intermediates to long end yields still below Nov'22 levels. 10YY tapped 4.0893% high, 30YY tapped 4.0446% - highest since Nov 10.
• Fed funds implied hike for Mar'23 at 30.5bp, May'23 cumulative 57.6bp to 5.154%, Jun'23 75.3bp to 5.331%, terminal slips to 5.430% in Oct'23 vs. 5.51% morning high.
• Fed speaker scheduled later: Fed Gov Waller eco-outlook, text, moderated virtual event at 1600ET
• MN Fed Kashkari on race, justice and economy w/ MN Supreme Court Justice Alan Page at 1830ET, Livestreamed