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The current Treasury bear market has been impressive, and unfortunately for the bond bulls, there is no valuation reason for it to stop. For example, the 5-year Treasury is still trading well below the overnight rate. If we look back to the 1994 bond bear market, the 5-year traded about 250 basis points above cash — versus about 100 basis points below now.The explanation for this disparity can be pinned on the Fed reaction function....Bond EconomicsAt Least It's Not As Bad As 1994Brian Romanchuk
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The current Treasury bear market has been impressive, and unfortunately for the bond bulls, there is no valuation reason for it to stop. For example, the 5-year Treasury is still trading well below the overnight rate. If we look back to the 1994 bond bear market, the 5-year traded about 250 basis points above cash — versus about 100 basis points below now.The explanation for this disparity can be pinned on the Fed reaction function....Bond EconomicsAt Least It's Not As Bad As 1994Brian Romanchuk
Topics:
Mike Norman considers the following as important:
This could be interesting, too:
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The current Treasury bear market has been impressive, and unfortunately for the bond bulls, there is no valuation reason for it to stop. For example, the 5-year Treasury is still trading well below the overnight rate. If we look back to the 1994 bond bear market, the 5-year traded about 250 basis points above cash — versus about 100 basis points below now.The explanation for this disparity can be pinned on the Fed reaction function....
Bond Economics
Brian Romanchuk