The all-important 10-year T-note is crawling toward 5.25 percent, the level of the Fed hike due next Thursday. Mortgages are following in slow motion, although 30-year rates are still below 7 percent. There were no economic data of note. Bonds generally followed stocks, as they have for weeks. When stocks fell apart two weeks ago, bonds assumed that the crater marked the long-awaited economic slowdown, a Fed stop and perhaps a retreat. As global equity markets have rebounded since, bonds have priced an indefinitely deferred slowdown. A 5.5 percent Fed in August seems a sure thing, and more forecasters (Barclays and J.P. Morgan) have projected a 6 percent Fed by year-end. That 6 percent forecast is also a forecast of a hard landing. The last two episodes at a 6 percent Fed ('95 and '00) res...
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