Thatās one reading of it. I think thereās more chaos in the markets at present than one explanation can account for, i.e., thereās little consensus about what comes next.
The immediate, post 9/18 deterioration in bond pricing wasnāt due to inflation concerns, it was reassurance the the Fed would be more accommodative and that the risk/reward balance favored equities (which depressed bond demand). War in the Middle East, oil price shock risk, the election, inflation coming down globally, seasonal adjustments are all in the strew pot, I just donāt know how you tease one out from another.
My old boss wrote a blog post a couple of days ago and he thinks the rates will fall after the election*, but it might be later in Q1 before we get back to where we were 9/12-9/17.
*he actually didnāt write this part, but I bet heās counting on the Dems losing the Senate, House and President both go Dem, and a divided Congress reassures markets that fiscal policy will be restrained.