The bond market showed some weakness overnight, with European trading sessions seeing most of the movement. The domestic session saw some losses, but they were mostly erased after economic data was released at 8:30am ET. The Import Prices were higher than forecasted, while Export Prices remained steady. However, the Consumer Sentiment data showed an uptick in 5-year inflation expectations, which is bad news for those hoping for rate cuts this year. Fed Governor Michelle Bowman’s comments were also hawkish on monetary policy, further reducing the chances of rate cuts. The bond market bounced back slightly yesterday, but the rally seemed to be running out of steam. MBS were down 37 points on the day, while stocks were down 7 points. Prior to the Silicon Valley Bank failure, interest rates on bonds issued by large regional banks were about 15bps higher than for money center banks. However, the gap has since widened to about 135bps due to investors’ fears of regional bank failure and added regulatory burden.