Yields Resilient Despite U.S.-Iran Peace Hopes & What it Means for Fed

• Treasury yields remain elevated due to persistent factors like sticky core inflation (around 3%), ongoing budget concerns, and global bond yield trends, rather than solely crude oil prices.
• Inflation expectations, as indicated by TIPS break-even rates and survey data, have moderated, suggesting that recent energy price spikes are not leading to embedded long-term inflation pressures.
• The FOMC is expected to maintain current policy, drop its easing bias in favor of a neutral one, and the new Fed Chair, Kevin Warsh, will likely project patience regarding future rate adjustments.

The discussion centers on the resilience of Treasury yields despite hopes for a U.S.-Iran peace deal, attributing it to sticky core inflation, budget concerns, and global factors beyond just crude oil prices. The analysis also covers expectations for the upcoming FOMC meeting, anticipating no immediate policy change, a shift to a neutral bias, and a patient outlook from the new Fed Chair.