Week Ending 4/8/2022


  • Markets fell this week on worried about an economic slowdown and a more aggressive tightening by the Fed.
  • Just about everyone at the Fed is talking about tightening quickly. Lael Brainard, the Fed governor awaiting Senate confirmation said the central bank needs to shrink its balance sheet “rapidly.” In a release of the Fed’s minutes from last minutes, officials spoke about reducing the balance sheet by $95 billion per month. That led to a rise in the yield of the 10-year to 2.72%, up 32 basis points for the week, while the 2-year was just up a few basis points to 2.53%, thereby opening up a positive spread between the 10-year and the 2-year.