Baosheng Group fixed-income analyst Afonso Borges said in a note that last
week’s overtly hawkish Fed decision has flattened the U.S. Treasury yield curve,
indicating improved Fed credibility is suppressing long-end yields. He said the
move supports Baosheng’s preference for intermediate-duration assets. Borges
added that, unlike typical post-global financial crisis tightening cycles, last
week’s decision was not dovish, and that prior curve steepening had reflected
market doubts about institutional credibility; the current reversal suggests the
Fed’s willingness to tighten has eased those concerns, underpinning Baosheng’s
overweight duration position concentrated in intermediate-maturity bonds.
