One Bank Warns: “Markets Are Too Sanguine,” Fed Hikes Now More Likely

As noted on Thursday,  there's a tug-of-war developing between two competing narratives on US Treasurys. Here's what we said yesterday: On one side are those who, like Bloomberg’s Mark Cudmore, believe that the Fed’s messaging on Wednesday conveyed a cautious outlook on the economy thus telegraphing “much more to come” in terms of falling yields and USD weakness. On the other side are those who are sticking with the reflation story and hanging on to the idea that dissipating political