Bond Market Sends Clear Message on Fed's Inflation Target

The bond market is sending a clear message about the Federal Reserve's ability to meet its inflation target. According to Nicole Cervi, an economist at Wells Fargo, traders are pricing in higher inflation over the long term and have given up on the Fed delivering on its promise of getting inflation back down to 2% by the end of the year.

The market is reacting to the Federal Reserve's press conference last week, where expectations for a rate hike by the end of the year were priced out. This suggests that investors are no longer confident in the Fed's ability to control inflation, which could have significant implications for interest rates and economic growth.

Cervi notes that the market is essentially saying that the Fed will not be able to meet its inflation mandate anytime soon. This has important implications for businesses and consumers who rely on the Fed to keep prices stable.