Get in Front of This Trade
At a glance, the U.S. Treasury market seems to be trading based on oscillating risk on/risk off attitudes. But closer examination shows that not to be the case. I have been arguing in this space that, while risk aversion can cause Treasury bonds to rally on a given day, only Federal Reserve policy can keep interest rates low. In fact, I believe rates will keep drifting lower so long as the timing for the Fed's first rate hike continues getting pushed out ever further.
The trouble is, betting. Rates are already extremely low, and I can't say for sure how much further "drift lower" might take them. Given the current valuation, I'm loathe to put on such a high-risk and low-reward trade....460 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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