Today's bond market moves are curiously large, with US 10-year yields down 15 bps to 3.54%. That's at the same time as stock markets have moved sideways
The 'normal' view of today's market is that a few factors have come together:
- Powell's dovish shift leading to conviction that 6-7% Fed funds are off the table, with the terminal top around 5%
- The turn of the month
- A bit of a dollar-bonds spiral
- The ISM report lending conviction to hard landing theories (almost all the bond buying has been since the report)
- Technical factors on the breaks of recent ranges in yields
Maybe that's it and I'm certainly waiting for my favorite bond strategists to weigh in but I have to worry about the Blackstone story. Greg broke it down wonderfully, it's an illiquid market that was a total darling for years. It's a place that many people had circled as problematic for a long time. Since these are private markets, there's no way for larger markets to identify what's going on. But when Blackstone limits redemptions, many people are taking it as a sign of trouble.
With stocks already 20% off the lows and bonds still yielding above 3.5%, many people are taking the opportunity to buy some safety until the dust settles.
