Ever since the inflation data in Q1 proved to be less rate-friendly than we might have hoped, the Fed has been exactly as unfriendly as we might have expected.  In other words, things have been logical.  The Fed didn't have enough confidence to talk about rate cuts before and they have even less confidence now.  Still, they had to address the improvement in April's data (out last week) and they've been quick to say they need several more months of the same in order to cut.  Indeed, the conversation has shifted decidedly back in favor of "caution against cutting too soon" as opposed to caution against sabotaging an economic recovery by leaving rates too high for too long.  Apparently, bonds are well-priced for such things. Even as several Fed speakers reiterated hawkish messages this morning, yields moved modestly lower.

Tuesday is 4th day in the 11 day weekend culminating in next Monday's Memorial Day holiday.  The base case is for broadly sideways movement in the bond market with anything inside a range of 4.34 to 4.50 being completely uninteresting.  Fed speakers were the only game in town on today's event calendar and at 4.41-ish, yields are safely in the middle of the range.