Bond Bears Revel In Worsening Long-End Selloff

This week's earliest price action underscored the peril inherent in leaning long duration into a trending bear steepener. As expounded here at some length over the past several days, I doubt seriously the notion that the selloff at the long-end of the US Treasury curve can continue unabated in perpetuity. That's only barely a straw man. Bond bears have it in their heads that the (compelling) case for structurally higher yields may preclude (or at least raise the bar for) a rally in the event t

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4 thoughts on “Bond Bears Revel In Worsening Long-End Selloff

  1. When
    – Mortgages are 8%
    – Auto loans 12-18%
    – Credit cards 25%
    – Middle market commercial credit 11-14%
    – Five year notes issued at 3% in 2020 are a year from refinancing at 8%
    – Cap rates are 200 bp below T-bills

    with large parts of the economy – houses, cars, credit-driven spending, development, small/medium biz borrowing – slowing to stasis,

    with industrial PMI already hovering in contraction,

    job openings falling, hiring slowing, wage hikes fading,

    analysts will still be forecasting +10% earnings growth next year

    and stocks will look attractive on outyear numbers

    that never arrive.

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