Where we differ now versus our initial 2022 framework from 1Q is that we believe the Fed has no choice but to follow through with its hawkish intentions in order to coral inflation (and that will take place via aggregate demand destruction). See the bond market rallying back 75bps or more in the 2nd half of this year. Forecasts bull-flattening with 3% U.S. 10-year yield as of 2Q22 falling to 2.25% in 4Q22 and 1.75% in 4Q23. See Fed funds rate around 1.625% in 4Q23 after peaking around 2.125% in 3Q22. - MUFG Macro Strategy
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