by Mish

Rate Hike Odds Drop

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Big Yawn

In addition to the bond market letting out a big yawn, rate hike odds did the same. In fact, they declined slightly from 53.2% to 48.7%.

The Global Macro Monitor blog via ZeroHedge blames the Incredible Shrinking Relative Float Of Treasury Bonds and central bank manipulation for falling yields.

Manipulation is certainly present, but the Fed stopped padding its balance sheet long ago. And it’s pretty clear the key decision-makers at the Fed want to hike.

Thus, it’s a big mistake to discount the idea of a weakening economy as the primary reason yields are falling even if the absolute level of yields is in serious question by manipulative actions.

Mike “Mish” Shedlock

FOMC Holds Rates, Mush “Transitory” Statement Follows: Interesting Bond Reaction

As universally expected, the Fed did not hike rates at the May meeting. Instead, the FOMC committee issued a boilerplate Press Release that the first quarter slowdown is transitory and that inflation expectations are balanced.

Bond Market Paralysis: What Happens When Central Banks Own the Market? Mish’s Sure-Fire Proposal

Here’s the question of the day: What happens when central banks own the market? The answer comes from Asia where Japan’s Government Bond Market Grinds to a Halt and the yield on 10-year Japanese bonds did not move for seven days.

Red Hot Junk and Massive Bond-Market Dislocations; Equity Smash Coming Up?

The economic data does not support a rate hike. Is the Fed really worried about something else?

Trade Reactions

Foreign trade reactions are pouring in. Here's a summary of the top replies from foreign officials.

Spotlight on Emerging Markets and US Treasuries: Are Bonds Sending a Signal?

The emerging market trade has blown up. An "everything bubble" disaster awaits. Meanwhile, what about treasuries?

Reader Asks “Why Would Equities Sink in a Bond Market Dislocation”?

Reader Curtis writes “Hello Mish: Can you explain why equities would also go down in a bond market selloff?

Japan’s Negative-Yield, Inverted Bond Market Close to Breaking Point

Japan’s dysfunctional bond market is not only inverted between three month and eight years, it also sports negative yields out to 10 years.

Question of the Day: Is the Bond Bull Market Over?

Amidst talk of red lines, trends lines, and common sense lines, the debate lingers: Is the bond bull market over or not?

Fed Still Struggles to Get a Grip on the Bond Market

Bond market volatility remains a sight to behold, even at the low end of the curve.