Rate cuts, right? Sure, that's the premise. Like eurodollar futures, the front end of the yield curve is saying that there are more of them coming. The Fed's unscheduled fifty will be augmented by another fifty at the next FOMC meeting in a few weeks. If not sooner.

The rest of the yield curve, though, there's a little more to it. For the first part, the long end is all about consequences. As in, if rate cuts were expected to be effective then, cue Janet Yellen in 2011, bond yields would be rising sharply. They are not, to put it mildly.

Long end rates have collapsed along with the short end. Therefore, the same thing that is driving the Fed to a rapid series of rate cuts the market is expecting this to be a long-lasting negative. It's not just the prospect of looming recession, though that is more and more indicated by this "bad steepening" (where the short end of the curve falls faster than the long end), it's the impotence of central bankers.