Consensus continues to downgrade growth expectations, and Treasury markets are starting to price a recession coming.
This narrative in rates is in sharp contrast to the story being told in equity and credit markets, where the consensus has only revised down earnings expectations very modestly, see chart below.
The bottom line is that rates investors and Fed watchers are getting increasingly worried about a coming recession, but equity investors are much more bullish and see little reason to downgrade earnings expectations meaningfully.
Our chart book with daily and weekly indicators for the US economy is available here.
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