Brean Capital's Scott Buchta said the.......>

US TSYS: Brean Capital's Scott Buchta said the "markets has seen choppy trading

activity this morning in reaction to various central banker headlines

(Dudley/Draghi) and saber-rattling. The yield curve continues to flatten as the

market trades off of a hawkish Fed and mysterious inflation figures (including a

new measure of inflation from the NY Fed, the Underlying Inflation Gauge,

released last Friday). Interestingly enough, this new measure shows inflation

rising at its fastest level since November 2007 (2.74%) while the spread between

5s and 30s is near its tightest level over the same time frame. So while the

Treasury curves trades hawkish, the OIS and Fed Funds curves trend dovish with

the next rate hikes projected in early 2018 and late 2019 respectively."

- He adds that "while the market continues to buy dips (both foreign and

domestic), over the medium term, we believe that rates could grind higher due to

increased supply and decreased Fed purchases."