Long Treasuries benefit from bets on rate cuts by the Fed - sure they don't control the long end of the curve, but lots of mkt participants haven't digested that the Fed Put is a thing of the past.
As long as there are buyers for Treasuries, the Fed can sit idly by while the stock or housing markets crash. Ironically, it's the lack of belief in this causing duration to be bid up.
Brilliant Russell. The clearing houses have suspended Darwinism. That is the perfect way to look at it.
Long Treasuries benefit from bets on rate cuts by the Fed - sure they don't control the long end of the curve, but lots of mkt participants haven't digested that the Fed Put is a thing of the past.
As long as there are buyers for Treasuries, the Fed can sit idly by while the stock or housing markets crash. Ironically, it's the lack of belief in this causing duration to be bid up.
it is certainly difficult to see the recession that some claim has already arrived. while I sense a bad vibe, the data does not yet support the thesis