The US Fed corrected a policy error earlier in the year, in response to which the stock market and bond market has rallied. The differential between overseas and US bond yields remains significant. The US economy is cooling down, overseas economies are doing the same.
Going forward, the US Fed may drop the Fed funds rates, in order to steepen the yield curve. The futures markets are hinting at a rate cut. if this were to happen, one would see a decent rally in the long end of the yield curve. US ten year should hit resistance here, right at the 2.55-2.65%. If it is buffeted back here, one could make a case that it tests 2%, especially if earnings falter.
If this is a baseline case, should one not invest in the long end of the yield curve (20-30 year maturity) for a trade?
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Also see our past work on big picture macro analysis