Source: Bloomberg
Author: Michael Mackenzie, Liz Capo McCormick, Ruth Carson
Political factors have a betting on the most dangerous beta on US Treasury bonds, but only the Fed can let it truly restore its vitality.
Donald Trump's momentum brought by the kinetic energy to make long -term government bonds, which pushed its yield.The market calculation is that his tax reduction and increased tariff plan will stimulate inflation and worsen the US fiscal conditions.
The accidental effect brought by "Trump Trading" is that investors who bet the short debt yields exceeding long debt will return to normal investors.However, the next step is also required to start interest rate cuts in order to make this transaction truly hold the position.The loose policy should lay the foundation for the continuous decline of the short -term decline of the yield curve.
"The Federal Reserve lowered interest rate is a major catalyst with steep yield curves," said John Madziyire, a high -end investment portistor manager of Vanguard.Key and center "
Over the past two years, the bond market has fallen into the so -called yield curve inversion, and the two -year yield has exceeded the benchmark 10 -year Treasury bond.Many people have been reversing for almost the same time, but in the end, it is contrary to their wishes.But the situation has changed.
Trump was attempted to assassinate on weekends, and the return on the 30 -year US debt yield on Monday has exceeded 2 years of debt for the first time since January 31.The Republican National Assembly opened on the day, and investors are also weighing how the party's voters will affect the election results of the two houses of the public.
"We need to take a step back, because there are still a long time from now to the general election, and things may change quickly," Crossmark Global Investments chief market strategist Victoria Fernandez said in an interview with Bloomberg TV on Monday, saying thatIf the steepness triggered by Trump continues, it will have a lot to do with the results of the conference, and it depends on whether the Trump campaign team can attract mild voters.
