UST averages tonight: Bills 4.365 Notes 4.410 Bonds 4.695.
Low duration issues yield the least, long duration issues the most, and the middle looks like the middle should look, middling.
That's how it should be.
Low duration issues have been dominating the curve, yielding the most. Why, just at the beginning of the month the 1MO still yielded 4.75, more than any other security. Tonight the 1MO yields 4.44 and the 20Y yields 4.74, the leader. The yield laggards are the 6MO and 1Y at 4.30. That's what you want to see happen.
The Fed today dropped the Federal Funds Rate 0.25 points to 4.25. I expect the short end to keep moving lower as a result, and the middle to rise more in tandem with the long bonds as inflation continues to bite.
But we shall see.
