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“Davidson” submits:

The 3-month Treasury rate has been declining in recent days. Today’s low below 5%. There are two possible reasons for this IMO:

1)      Individuals are getting more bearish and selling equities for money market

2)      Institutions are lessening the Short-month/Long-5yr-10yr Treasury hedge that seemed in place the last 2yrs.

A continuation of this pattern is how the Fed comes to cut Fed Funds once the 3mos moves to 4.75%. The commentary I am hearing is that “no-landing” or “soft-landing” has replaced “hard landing”. The hedge will not work without a hard landing.

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