The Fed sounded optimistic about growth, but its view that the risks of inflation and inflation expectations were reduced is the hallmark buy signal for the back end (of the bond curve),

He's telling you the Fed's probably got more room to continue to hike, but inflation is not going to be a problem. That tells me that the 10-year doesn't need to move that much, but the two-year note probably is going to track toward a 5 percent fed funds rate.

What's happening is that the inflation premium is being taken out of longer-dated securities.

This is obviously a continuation of what we've been seeing, which is strong economic growth and inflation expectations.

A curve inversion will last until the Fed stops tightening. As long is the Fed keeps tightening and inflation remains benign, the curve should be inverted.

At its current levels, inflation becomes self-perpetuating because of expectations of higher inflation.