What's happening is that the inflation premium is being taken out of longer-dated securities.

He's telling you the Fed's probably got more room to continue to hike, but inflation is not going to be a problem. That tells me that the 10-year doesn't need to move that much, but the two-year note probably is going to track toward a 5 percent fed funds rate.

A curve inversion will last until the Fed stops tightening. As long is the Fed keeps tightening and inflation remains benign, the curve should be inverted.

The Fed sounded optimistic about growth, but its view that the risks of inflation and inflation expectations were reduced is the hallmark buy signal for the back end (of the bond curve),

They're not done and it's clear to me that these guys really are worried about an inflation bulge. You are seeing clouds on the horizon because of inflation.

Inflation springs from how intensely resources are used. There is an enormous amount of unused capacity sitting out there, and it takes a lot of growth to absorb that.