The US dollar isn't getting much of a lift from higher Treasury yields today. The US 10-year just touched back above 3% with yields across the curve higher.
There's a classic 'risk on' theme in markets today with S&P 500 futures up 30 points and the dollar slipping.
The bond market isn't getting much broader attention at the moment because we're inside the recent range. It will take a rise above 3.10% to cause some real cross-asset concern.
Here's what strategists at BMO wrote this morning:
Investors appear content with assuming the FOMC will limit its hiking endeavors to this calendar year; an eventuality which then begs the question of how long the Fed will be able to hold terminal this cycle. While history shows a varying degree of times-at-terminal, ranging from 3 to 15 months, the market is already pricing in cuts for 2023. Forecasting rate reductions next year implies Powell’s efforts to contain inflation are ultimately successful and attempts at cooling the jobs market overshoot the mark, leaving the unemployment rate higher than the Fed’s objective. Both of which are our base case scenario; reinforced further by the global tightening efforts now fully underway.