"Those things needed to be changed, have been changed." [The necessary changes have been made.]
And so it goes....with the rates space. Last year at this time the market was in melt down mode and horror stories of a "Bond Vortex" filled the airwaves. We fell victim to the concept of value and suffered our worst draw-down last June. The hard line between early and wrong was drawn again.
The meme now creeping through the market is the 2.5% yield on the 10 year note is a "Scarlet Letter" of credit super cycle hubris. I'm unconvinced. Fixed Income isn't conducive to the "momo" analysis of equity traders no matter the popularity of the TLT. Positioning in the belly has under gone a dramatic shift (remarkably, no one was harmed, we are led to believe). Swinging back toward steeper could be the sunburn trade for Summer.