Bond traders have completely given up on the expectation of interest rate cuts in 2026.

Oil prices are pushing inflation higher, with Core PCE at 3.1% (target 2%). At the same time, the economy is slowing down.
This is called stagflation. High prices + low growth, the most uncomfortable combination.
The stock market is still struggling with whether to go up or down. The bond market has already priced in a recession.
Historically, each story told by the stock and bond markets has been different, but in the end, the bond market has been right.