Falling oil no longer signals lower yields, BofA says

AI Summary

Bank of America states that despite falling oil prices, U.S. front-end real yields are expected to stay elevated due to markets anticipating a more aggressive Federal Reserve stance on inflation. Resilient economic data and risks to oil prices support a bearish stance on yields.

Bank of America said U.S. front-end real yields are likely to remain elevated even as oil prices have retreated, arguing markets are increasingly pricing a tougher Federal Reserve response to persistent inflation rather than simply tracking moves in crude prices. The bank said resilient economic data and renewed upside risks to oil support maintaining bearish ...