FED: US TSY 10Y AUCTION: NON-COMP BIDS $178 MLN FROM $42.000 BLN TOTAL

• Tsys gap to new session lows on latest from Fed Gov Waller at NYABE conference the Fed "may need to consider near-term rate hikes" to combat sticky inflation.
• TYU6 trades -12 to session low of 108-21 (yld +.0523 at 4.6136%). Key support and the bear trigger is 108-08+, the May 19 low.
• Projected rate hike pricing gaining vs. late Friday levels (*) Sep near fully pricing first 25bp hike: Jul'26 at +10.3bp (+8.4bp), Sep'26 at +24.4bp (+21.6bp), Oct'26 at +31.3bp (+27.4bp), Dec'26 +41.2bp (+37.1bp).
• Stocks not taking kindly to the comment either: SPX emini -56.25 at 7564.00.

Fed Governor Waller (permanent voter) comes out with a more hawkish bias, prompting hawkish cross-asset adjustments in prepared remarks at NYABE. See the full speech here. 

• "If we get another hot reading on core inflation this week, then the FOMC will need to consider tightening monetary policy in the near term".
• "We need to avoid making the mistake of fighting the last war and reacting too soon to tighten inflation, merely because we waited too long last time. But we also must avoid repeating the same mistake we made in 2021 and 2022 by waiting too long to respond."
• "I would be very pleased to see a lower reading on core inflation, but after its escalation over the first half of this year, I will need to see several months of lower readings to feel that inflation is moving in the right direction. That is still a reasonable outcome, and I would then continue to hold the policy rate at its current target range." 

Spain hoping to build momentum behind proposal for joint EU-member state bonds- On MNI Policy MainWire now, for more details please contact sales@marketnews.com