The 2-yr Treasury continues to trade through the Fed Funds Effective Rate post meeting today implying an ease on the horizon. 

Chairman Powell made it very clear that they “don’t see a strong case for a rate move in either direction” and that while they are watching inflation, they believe the recent softness from inflation is transitory.   We agree.

A wild ride for Treasuries today, rallying into the briefing (higher prices/lower yields) and selling off as Powell was speaking.   The front end finishes the day higher in yield.  With yields on Treasuries out to 5 years trading below target Fed Funds, expect more volatility on the horizon.