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How Long Will Inflation Last?

US TSYS
FI futures trade firmer after the bell, off midday highs on moderate volumes (TYM2 just over 1M), yield curves flatter on narrow range (2s10s -2.58 at 30.65) with short end lagging despite several block buy in 5s on the session.
  • No obvious headline trigger, Tsys broke upside range soon after the equity open. Little react to morning data (NY Empire mfg index -11.6, new orders -8.8) with two-way trade/inside range by midmorning.
  • Nothing really new from NY Fed Williams espousing 50bp hikes next couple meetings, comment "WE DON'T KNOW EXACTLY HOW LONG INFLATION WILL STAY HIGH" not exactly confidence inspiring.
  • MNI exclusive w/ Loretta Mester: "With inflation as high as it is, and with expectations for inflation above 2%, you need to take into account that -- at least on the short end -- we’re still at an accommodative stance of policy. And even if we get up to 2.5%, depending on what’s happening on the inflation and expected inflation, we may still be accommodative," she said in an interview.
  • Fed speakers resume Tuesday: Bullard, Harker, Kashkari, Mester, Evans through the session, Chairman Powell headlining at 1400ET.
  • Deal-tied flow in the mix Monday with just under $10B swappable corporate issuance lead by $3B Paypal 4pt on the day. Gradual start to Jun/Sep Tsy futures rolling kicked off while June option expiration this Friday also added to volume trade.
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FI futures trade firmer after the bell, off midday highs on moderate volumes (TYM2 just over 1M), yield curves flatter on narrow range (2s10s -2.58 at 30.65) with short end lagging despite several block buy in 5s on the session.
  • No obvious headline trigger, Tsys broke upside range soon after the equity open. Little react to morning data (NY Empire mfg index -11.6, new orders -8.8) with two-way trade/inside range by midmorning.
  • Nothing really new from NY Fed Williams espousing 50bp hikes next couple meetings, comment "WE DON'T KNOW EXACTLY HOW LONG INFLATION WILL STAY HIGH" not exactly confidence inspiring.
  • MNI exclusive w/ Loretta Mester: "With inflation as high as it is, and with expectations for inflation above 2%, you need to take into account that -- at least on the short end -- we’re still at an accommodative stance of policy. And even if we get up to 2.5%, depending on what’s happening on the inflation and expected inflation, we may still be accommodative," she said in an interview.
  • Fed speakers resume Tuesday: Bullard, Harker, Kashkari, Mester, Evans through the session, Chairman Powell headlining at 1400ET.
  • Deal-tied flow in the mix Monday with just under $10B swappable corporate issuance lead by $3B Paypal 4pt on the day. Gradual start to Jun/Sep Tsy futures rolling kicked off while June option expiration this Friday also added to volume trade.