Inflation-Led Repricing and the STIR Curve

Over the last stretch think week or two… given the recent action feel like months! The market has given us a pretty clean real-time version of the framework I was laying out earlier. The move has not looked to me like a classic growth re-acceleration story. It has looked much more like an inflation-led shock being pushed through the front end of the rates complex, with crude (and other '“energies”) doing the heavy lifting, cuts being priced out, and curves flattening as the market adjusts to a higher-for-longer near-term policy path without fully embracing a stronger real-growth backdrop.

That distinction is the whole point. Below we diver into the 4 stages of the repricing and set the expectation of what’s next for curve and stir.