The yield curve steepening is the dominant theme

There is only one theme in fixed income dominating the markets: the steepening of the yield curve. Two processes are occurring. First, there is a natural movement to normalcy after the excesses in monetary policy post-GFC. The QE programs drove all rates down, leading to a long-term inversion. The normal yield curve should show a term premium, and the curve should be upward sloping. Two, there is the threat of further Fed rate cuts, and investors are getting ahead of it, so we are seeing short rates move lower and steepen the curve. This one-two punch is driving all interest rate action beyond the general rate cut.