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Thomas Johnson

I'm surprised that you find this surprising. The two-year note, which mostly reflects investors' anticipations of future Fed rate moves, is of course going to have large increases this year as investors react to the Fed's increasingly hawkish stance on inflation.

The Fed has deviated from Taylor Rule-style moves (appropriately, since there was a crisis), and now has to raise rates to compensate and bring down future inflation.

Similarly, if you had to pick either an "up" or "down" direction for the stock market after these movements in the two-year, you would probably tend to pick "up" since future rate increases imply loose monetary policy at present, which in turn means financial life is good in the very short-term.

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