Asking about moves in front end of US curve and whether market is overdoing it.
Speaker1
Speaker2
US in specific situation with Fed dual mandate and uncertain labor market. Europe/UK reaction makes more sense. Not a move to jump in front of due to Middle East uncertainty.
Speaker2
Yield curve rapidly compressing/narrowing. People expecting higher front end yields will send growth substantially lower.
How much confidence that this is correct move for much lower yields in response to holding rates higher?
Speaker1
Speaker2
Flatter curve makes sense. 10 and 30 years should outperform. If Fed fights inflation/delays rate cuts, breakevens compress and nominal rates slip lower.
Speaker2
Worried about not fully integrating demand impact and higher pump prices forcing consumer hard choices.
Is it bullish or bearish for fixed income, bonds, treasuries?
Speaker1
I think it's long term...
Speaker3
Polish.
Speaker4
Speaker2
Long term bullish for treasuries. Lower rates remains my base case. 10-year yields below 4% by end of year. Two-year sector will continue to struggle.