Maybe we haven't seen the same magnitude of rate declines that we typically have seen in easing cycles, but directionally it has been a fairly classic bond market reaction to the easing cycle.
Sentiment in the bond market has really soured.
If the Fed is not going to do the heavy lifting, the bond market is going to do it for them.
The equity market is clearly more vulnerable to the Fed not taking any action.
The employment report will make or break the bond market this week. Until you start to see moderation on the employment front, you're not going to see much of a slowdown in the economy.
For the bond market, it's clearly not bullish, ... At a time where growth is strong, the labor market is still tight, and price pressures are building, the last thing you need is a surge in energy prices that will push inflation up across the board.
The market was overbought surrounding the employment report and the heavy supply is weighing on it.