(Bloomberg) — Fed Chair Jerome Powell will likely avoid discussing election results at Thursday’s FOMC press conference and instead stress the urgency for further fiscal support while remaining neutral on what shape and form it should take. We expect the resurgence in virus cases, and its potential impact on the economic outlook, to take center stage in the central bank’s communication.
Code for further government shutdowns.
The reaction in the bond markets? The 10Y Treasury yield declined 12.5 basis points.
And the 10Y-3M yield curve slope dropped as well.
Short-term Treasury volatility crashed as the Blue Wave fantasy failed to materialize.