US 10 years down a massive -4.56% just today ahead of FOMC

US yields are down and the 10-year benchmark is down 13.61% YTD at 2.11% today and down a massive -4.56% just today.

The markets are concerned about the FOMC's judgement over the US economy and the delays in Trump's implementation of the fiscal policy that was priced into the market at the start of his term. There have not been any measures to support the economy and the market abandoning all hopes of inflation meeting or exceeding the Fed's target in neither the short or longer term.

"This view is confirmed by the notable fall in core inflation since February," explained analysts at Commerzbank. We have already seen today's CPI data that sent the dollar into a tailspin. Today's FOMC outcome is expected to be a dovish hike and thus may not damage yields too much on such an outcome. "If it lowers its (rate) outlook this merely confirms the market’s more cautious view so that there would, therefore, be little reason to trade USD at weaker levels," explained the analysts at Commerzbank. However, they added that, if on the other hand, it maintains its view this might almost be seen as a hawkish surprise, supporting the dollar on a temporary basis, also supporting yields. 

Key notes:

FOMC Preview: 13 major banks expectation from June meeting

We are closing into the FOMC’s June policy meet decision and as the clocks tick closer to the decision timing, following are the expectations as forecasted by the economists and researchers of 13 major banks along with some thoughts on the future course of the Fed's action.