The morning after finds long-dated Treasury prices flat after yesterday's big post-Fed gains.
As loud as the action was at the long end of the curve, it's even louder at the short end. The December 2016 Eurodollar futures has erased about 2 Fed rate hikes between now and then with a near-50 basis point move higher since yesterday at 2 ET. At 97.62, it's now pricing in 200 basis points of hikes over the next 2-plus years. The 2-year Treasury yield is at 0.32% after being over 0.50% just days ago.
"Not braggin' but what did we tell you," tweets Bill Gross. "Today marks the beginning of the Yellen Fed - front-end friendly for a long time."