This is the 'single most important factor' driving bond market sell-off: Fmr. Fed vice chair

What do yields being higher this morning tell you about what the bond market is watching?

The most single most important factor in in in driving Treasury yields is is expectations about what the Fed will will do. That being said, there are other things that can drive treasury yields as well. Growth prospects, the fiscal outlook, the state of the global um economy. So, the chairman is correct that the Fed should try to look at movements in asset prices, uh and in particular to see what it's telling them about things other than Fed uh policy.

The GDP report itself was was a little bit of a mixed picture. The headline number was a disappointment, but a a measure that folks look at sometimes is basically private final demand, which strips out inventories and also uh a trade. So it's sort of a clean read on how much stuff people are buying. Some of it goes out on imports and and inventories. And that number was actually up quite was quite healthy. Um and in particular as was nominal GDP.

So, you know, for those who might say bonds are responding to to macro data, there's probably an element of of that as uh as well. Um, and I'm still sorting through, as I think many of us are, where where rates are going to settle down uh now uh after after the Fed meeting yesterday. Of course, the reality as you know, in markets, they never settle down. We'll probably start to get Fed speak from the Reserve Bank presidents and governors starting tomorrow or or next uh week and and and their insights and comments are also going to be useful in filling in the detail.