Treasury Action: yields are moderately richer
Treasury Action: yields are moderately richer as dovish Fed views continue to support. The belly is outperforming with the 3- and 5-year maturities down just over 3 bps at 1.817% and 1.86%, respectively. The 2- and 10-year notes are over 2 bps lower at 1.839% and 2.11%. FOMC voter Evans said he agreed with the December tightening, but now can see an argument for cuts due to the global slowdown and low inflation. The market has priced out an aggressive 50 bp reduction at the end of the month but is priced for a couple of 25 bps moves this year, with some modest risk of a third. Meanwhile, geopolitical concerns remain an undercurrent with Iranian tensions as well as Brexit issues, which are supporting a bid in Treasuries ahead of the weekend. Concurrently, Wall Street is at record highs.