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Fed Jawboning Losing It's Charm?

US TSYS
Tsy futures finished strong Wednesday after trading weaker since Friday, 30YY down to 2.4980% from 2.6392% overnight (highest since Aug 2019) despite continued hawkish Fed-speak.
  • Cleveland Fed President Loretta Mester said Wednesday she was confident markets can handle both a more aggressive interest rate increase in May and the start of balance sheet shrinkage. SF Fed Daly conceded the Fed may hike interest rates half a percentage point at its next meeting in May.
  • Markets appeared to be de-risking ahead Thu's NATO address by Pres Biden, risk-off after National Security Advisor Sullivan: said "U.S. WILL UNVEIL NEW RUSSIA SANCTIONS: TARGET POLITICAL FIGURES, OLIGARCHS, ENTITIES, Bbg at the summit.
  • Tsy futures holding gains after strong $16B 20Y note auction reopen (912810TF5) trades through with 2.651% high yield vs. 2.662% WI; 2.72x bid-to-cover vs. last month's 2.44x.
  • Thursday Data Roundup: More Fed speak, weekly claims, durables, 10Y TIPS auction. Fed speak resumes:
    • MN Fed Kashkari eco-outlook, no text, moderated Q&A at 0830ET
    • Fed Gov Waller on housing mkt, text, moderated Q&A, 0910ET
    • Chicago Fed Evans, eco/mon-pol outlook, text, Q&A, 0950ET
    • Atl Fed Bostic moderated discus minority participation in economics, 1100ET

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