10-Yr to Hit 3% if Inflation Surprises, says Bory
Bloomberg Surveillance
Bloomberg
3.8 • 1.2K Ratings
🗓️ 12 February 2018
⏱️ 30 minutes
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Summary
George Bory, Wells Fargo Securities Head of Credit Strategy, sees the 10-year hitting 3% if we get an inflation surprise on Wednesday. Jared Bernstein, Senior Fellow at the Center Budget and Policy Administration, says that politicians just haven't been able to resist spending. Robert Shiller, Yale Professor of Economics, believes efficient markets are a half-truth. Joachim Fels, PIMCO Global Economic Adviser, doesn't think the correction is enough to derail the economy.
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| 0:59.6 | Let's go back to the tenure of a shorter duration, the benchmark, 2.89%, so that's now 11 basis points from 3% George Bory with this with Wells Fargo if I use the benchmark George where do I sweat where do we really click in with some |
| 1:06.1 | bomb damage what yield yeah thank you good morning Tom well I think 3% on the 10 yearyear yield is, it's somewhat of a magic number. |
| 1:15.9 | If you look back over time, there's some critical support levels where bonds should be trading within certain ranges and once you breach |
| 1:25.8 | kind of to call it three to 3.05% on the US 10 year you start sort of entering into what I would call the danger zone. |
| 1:34.6 | You lose a lot of technical support. |
| 1:37.2 | You know, those folks that look at historical trends and trade based on momentum will |
| 1:41.9 | start to lose faith in the ability of bond prices to go up. |
| 1:46.1 | So you know the expectation would be that yields go higher and then I think also importantly as you point out you know that would be about a 60 basis point increase in yields and so |
| 1:56.8 | Mark to market negative returns across investor portfolios become a lot more real and they certainly become a lot more |
| 2:05.9 | meaningful and so those bond investors who open up their statements at the end of the |
| 2:10.4 | month are going to be in for a little bit of a surprise. |
| 2:13.0 | Well that classic 60-40 mix looks ugly so far this year, doesn't it? |
| 2:17.0 | And I just wonder what that means for investor rebalancing in the coming months, George. |
| 2:21.4 | So I think there's a major shift going on you know for the |
| 2:24.5 | last ten years the the Fed and other central banks have told you to effectively sell |
| 2:31.1 | your cash and buy something else. |
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