Familiar Block Flow & Bowman’s Language Help Bid And Flattening To Develop Further

Comments from Fed Governor Bowman (who resides on the hawkish end of the FOMC spectrum) have facilitated a modest extension of the Israel/Lebanon missile headline-inspired bid.

• Cash Tsys now sit 1.5-11.5bp richer, with the flattening theme also extending, also aided by familiar size being deployed in a FV/US block flattener.
• In terms of the details, Bowman’s tone re: the need for further rate hikes softened a little, as below:
• Bowman earlier today: “This suggests that the policy rate may need to rise further and stay restrictive for some time to return inflation to the FOMC's goal"
• Bowman last week: “" I expect it will likely be appropriate for the Committee to raise rates further and hold them at a restrictive level for some time to return inflation to our 2 percent goal in a timely way.”
• In terms of Tsy specifics, Bowman warned that Treasury market functioning is at risk of again becoming impaired, especially as Fed QT continues and Treasury auction volumes expand to meet issuance needs, and that can disrupt central bank plans.