The bond market has been quiet. Too quiet in fact... In Societe Generale's view, this sideways movement will end when bond traders fixate on coming interest rates hikes -- which the bank expects the Federal Reserve to continue. 

"While the "Trumpflation" trade seems to be gradually deflating, recent Fed speakers continue to lean towards two or three more hikes this year, which is not currently priced in," Societe Generale says. 


There is one caveat to the call -- the looming threat of a government shutdown. The banks says that the odds of a shutdown have declined, but have not completely disappeared. If that happens the bank says the 10-year yield could fall below 2.25%.

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