To get broader rally involving cyclical and consumer names, need more tangible evidence US-Iran talks are progressing. Rally over last several weeks has been narrowly defined and focused on AI trade, which has shown itself untethered from geopolitical risks. AI trade has its own catalyst - Anthropic talking about $10.9 billion quarterly revenue. Market sees Fed moving toward potential of hike later in year. Inflation clearly accelerating higher, moving to 4-handle on headline CPI. Growth more resilient than expected. Accelerating growth with accelerating inflation moves toward hike potentially in back half of year.

Volatility backdrop still benign for equity and FX volatility. Acceleration in inflation clearly impacting global bond market. Until Fed starts communicating potential of hike in back half of year, that will keep putting pressure on long-end bond yields.

Market sees Fed moving toward potential hike later this year. Inflation accelerating to four-handle on headline CPI, growth more resilient than expected. Accelerating growth plus inflation points to hike in back half of year.

This acceleration in inflation is impacting global bond market. Until Fed communicates potential hike, pressure on long-end bond yields will continue.

Kevin Warsh to be sworn in as Fed chair; where does Fed rate path go?

Market sees Fed moving toward potential hike later this year; inflation accelerating to four-handle on headline CPI; growth more resilient than expected; accelerating growth + accelerating inflation points to potential hike in back half of year.