The bond market continues to signal peak inflation. US 10-year yields are down another 4.7 bps today as we fall further below the neckline of a head-and-shoulders pattern that I've highlighted a few times.
I think there's a clear signal around inflation here especially since this decline has largely come in a period of improving risk appetite.
That said, I can't rule out that Taiwan worries are playing a part in the bid today.
In any case, the measure target of the move is about 2.1%. Before we get there, we'll need to take out 2.5% but the biggest level might be Fed funds, which are at 2.25-2.50%.