The front end is getting relief from the pace of tightening. On October 8, Waller said hikes do not need to come at consecutive meetings. That is in line with what I told you in the last Tactical Positioning: I doubt he'll hike at the October FOMC meeting, as he'll play the little puppet Trump wants him to be. US02Y4.791 has pulled back from the 5% resistance, as we expected.

$US10Y 5.242000000000 and $US30Y 5.600000000000 continue to print new YTD highs after hitting major resistance. The divergence between short- and long-end yields is particularly noteworthy, as it suggests the market is realizing the war could last longer than it had expected.

Trump delivered the TACO needed to tame oil prices, as we can see from the price of $CL1! 91.850000000000, which at one point was $20 a barrel below its high. But this TACO has not translated into lower long-end yields. This is perhaps what Trump least wants to see. As the midterm election gets closer and closer, I expect Trump to pull stronger and stronger TACOs in an effort to tame yields. But unlike in 26Q2, I doubt such attempts could deliver a material trend change in yields.