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Belly Underperforming Most Since 2018

US TSYS

The belly of the curve is now underperforming on the session, with 5Y yields up 10.4bp and 7Y up 8.7bp. as markets digest the CPI print and potential for both higher medium-term inflation and Fed rates.

  • Accordingly, the 2s-5s-30s butterfly has (briefly) gone positive for the first time since June 2018 (see chart).

Source: BBG

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