Bond Market Dynamics

The bond market has shown a significant sell-off, particularly in long-duration bonds, as the two-year yield accurately reflects the Federal Reserve's rate hikes. Despite the fastest interest rate increases in U.S. history, the economy continues to expand, with job openings rising unexpectedly and GDP growth remaining strong. This disconnect suggests that the effects of interest rate hikes have yet to fully materialize in the broader economy, highlighting the complexities of the current financial landscape.