Quote:
Originally Posted by petegz28
Little tidbit that will surely go unnoticed but is definitely worth noting.....
The 2yr & 5yr bonds are no longer inverted. I have been watching that over the last few days and today (lsat night) they reverted.
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Correct. The curve has been steepening. The Fed will cut rates next Wednesday and then we're only priced for one more cut in 2020. Reasons include: 1/ some elements of a detente between China and the US in their trade dispute 2/ better news on Brexit (though this is still messy) 3/ the Fed instituting some liquidity injections that benefit the front end exclusively 4/ the US Treasury exploring - almost certainly at Trump's behest - issuing more long end securities.
The data has still been relatively tepid. And in 2020, a potential Trump/Warren election is seen as a major negative almost regardless of who wins.