US 2-year yields are threatening to break the 4% barrier ahead of the Fed.
That begs the question of how much hiking is priced in, and for how long. If you think the Fed can get to 4% in relatively short order and will hold there (or above) for two years then it's better to roll the t-bills but if you think there will be a U-turn then there's value in 2s. And in any case, there's certainly relative value in 2s with the Japanese front end still under water.
You can see the step up on the chart since Jackson Hole and CPI:
Another interesting spot is 3-year yields, which are just a touch behind at 3.96%. The Fed will release its first 2025 dot today and there's a debate on how close it will be to the 2.5% netural rate.
