One way to look at the drop in Treasury yields is that it's signalling trouble in the US economy but with stocks working on an 8-day winning streak, that's tough to square.
Maybe the answer is more-simple: The market sees no recession but steady rate cuts and a return to the low-inflation/cheap-money era.
That's a great dynamic for both bonds and stocks and it's underscored by the decline in 5-year breakevens back to 2%.
In addition, the market is pricing in a return to 3.00% Fed funds in 2026 but that leaves a strong 'Fed put' in place in case things in the economy deteriorate.
