10Y debt ceiling dollar economy

Harvey, The Debt Ceiling, And Why It Might Be Time To Fade The Pessimism

If you were following along last week, you know that more than a few commentators believe rates and the dollar have simply priced in too much pessimism around the U.S. economy and the fiscal outlook. No, the incoming data hasn't exactly been what one might call "gangbusters" and the prospects for tax reform and fiscal stimulus seem to dim every time Trump opens his Twitter app or decides to deviate from the teleprompter, but with yields near YTD lows, the dollar struggling to get any kind of traction, and positioning stretched, one could make a contrarian case based simply on the proposition that it would be difficult for the outlook to deteriorate much further from here. (Deutsche Bank, CFTC) As a reminder, part of the reason why folks are so concerned has to do with the daunting tasks ahead for a Congress that has proven utterly incapable of getting anything done. "Members of Congress return from summer recess Tuesday with the eyes of bond traders squarely upon them," Bloomberg wrote on Friday, before reminding anyone who might not follow markets closely that the angst is readily apparent in the T-Bill curve: Of course everyone you care to ask will tell you there's no c
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