Rotation Out of the Red-Hot Chips Stocks Gets Extended for Another Day

Atlanta Fed Nowcast model down to +1.2% second-quarter real GDP growth

Key Takeaways

• Bond Yields Defy the Disinflationary Story: What remains a mystery is how bond markets are reacting, because yields are up everywhere — 10-year rates are up +8 basis points in Japan (2.77%), by around +4 basis points across Europe and by +1 basis point in the USA (just below 4.5%). Not even the page B3 article in today’s New York Times titled Fed’s Warsh Says Inflation Poses Less Risk Than a Few Weeks Ago or Warsh Says Inflation Risks Abate on page A2 of the Wall Street Journal has managed to generate any bond market impact — but when he was construed as being “hawkish” at the recent FOMC meeting, the bond market sold off like it was nobody’s business.