Bloomberg Surveillance · Tuesday, July 14, 2026
While current economic data suggests the Fed will not hike rates, a notable increase in the two-year yield could alter this view. A two-year yield significantly above the Fed funds rate, though not yet at extreme levels seen in 2021-2022, is identified as a key signal to watch.
“I also think when you look at you know, ten year yields, are they escape velocity here? I would hardly say that. I mean twos, You can make a Case, hey twos, are you know four to twenty five this morning? There are fifty BIPs above FED funds. That's probably the one signal that I would say maybe pushes back in my view here a little bit.”
“I think by the time the Fed got around to hiking in early twenty two, the to year yield was something like two hundred BIPs above where FED funds were, So we're not yet a category, but wash the two year yield here, that would probably be the one thing that would struct to share my mind.”