The long-term deficit forecast played a role.
The economic fundamentals consistent with what's being priced into the government bond market is an economy that's on the brink of recession.
Growth in 2006 is probably going to be stronger. This means that the Fed is going to have to keep raising rates.
It's remarkable how stable core inflation has been.
The 10-year is not reflective of the fact the overnight rate is going to 4.75 percent in six weeks. It may have to do with carry. As long as you're earning positive carry, people don't mind holding 10-year notes.
With the FOMC meeting less than one week away, and 10-year rates soon to be within 25 basis points of the overnight rate, it is difficult to picture the market remaining at these levels.
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