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Conditions have rapidly deteriorated. Bad steepening has hit both ends. Rate cuts now close.
Both the Fed and ECB hiked rates this week (in successive days), each claiming inflation is still their greatest threat. German and Treasury markets didn't care one bit, altogether pricing unmistakable deflationary dangers that aren't in the future. They're happening right now. As one consequence, central banks are now priced to turn around into cuts by mid-summer. Maybe even late spring.
Eurodollar University's Money & Macro Analysis
FRB Chair Jay Powell May 2023 Press Conference
https://www.federalreserve.gov/mediacenter/files/FOMCpresconf20230503.pdf
FOMC May 2023 Policy Statement…
The skinny
The skinny isn't ready yet — notes appear once the transcript is processed.