TL;DR
Front-end fade stays on: the strip now matches the rules at a -6bp gap and the 2Y holds below 4.78% weekly (structural, months).
Hot core CPI at 0.3% is growth-driven inflation, which keeps December fully priced (structural, months).
Equity downside hedges at the 84th to 95th percentile bleed if risk holds; still NOT defensive here (positioning, days to weeks).
With stocks and bonds correlated at -0.14, I'm not relying on duration to protect equities, I'd use options for that (positioning, days to weeks).
Friday's PPI is the next test of the fade; a soft print is the only near-term bull defence (structural, months).
Where We Stand
Yesterday I said I'd keep fading the front-end as long as the 2Y holds below 4.78% on the weekly, and that today's core CPI would settle it. The core came in hot at 0.3% against 0.2%, Waller lit the 50bp fuse, and the 2Y rose to 4.51% on the close. The fade is now paying for itself, so the oldest open thesis, that the strip underprices hikes, is INTACT and I am not touching it (structural, months). The copper crowding is not my worry tonight; the live worry is my own call that crowded equity downside hedges bleed as risk holds, because the index slipped again and those puts have not paid (positioning, days to weeks).
I am not reversing anything. Today's 2Y move is the market repricing hawkish growth, and the proof is it went up while oil went down, which is the same view I had coming in yesterday.