A few things

From Morgan Stanley The Fed is now trapped by its own words: The recent decline of US inflation expectations is also important in respect of upcoming Fed communication. Tomorrow, the Fed will release its interest rate decision statement, in which it is likely to keep the door open for a summer rate cut. In his February testimony before Congress, Chair Powell called inflation expectations “the most important driver of actual inflation”. This statement opened the door for markets to trade heavily on the Fed cutting rates. If the Fed wants to ease this speculation, it will have to downplay the importance of inflation expectations.

U.S. 5y5y inflation swap the Feds favored inflation expectations gauge bouncing a bit higher today after touching a 3 year low.After Big drop in European yields ex ECB member praet tried to walk markets back a bit but had little success,ECB rate cut 21% For june and per bloomberg market pricing in cut of 10bs by end of Summer.

U.S. real rates Using Static CPI as not so helpful on day to day basis but using US 12 month Yield and 1 year breakeven rate,Real rates climbing today. Stocks Pulling back from todaays highs and bond yields off the lows as the Euphoria unleashed by Draghi fades.

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