USDU - The Markets Seem To Believe Jay Powell For Now

• The stock and bond markets have taken the view that inflation is “transitory,” as the headline CPI rose 5% yoy in May and the 10-year Treasury market celebrated the inflation news by sending yields down to 1.44%.
• The German/eurozone and Japanese money rates could be helping the Treasury market. If we have rising inflation globally, it stands to reason that investors are better off in Treasures (on a currency-hedged basis) than in near-zero yielding bonds.
• All that drama in the Treasury market resulted in a bid in the technology sector, which is a stone’s throw away from an all-time high, if one looks at the Nasdaq Composite.

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