Bond traders and economists are expressing noticeably varying opinions regarding the expected longer term implications of a Federal Reserve rate hike, an October 14 Capital Economics report notes, and this relative value gap is a sign “Treasuries are vulnerable.” Judging by Treasuries, economists looking for fed funds rate to rise by 2 percent in two years, market says 1.3 percent Coming into today’s trading, economists polled by the Wall Street Journal expect the U.S. federal funds rate to rise by nearly 2 percent in two years. This median forecast, however, is much higher than the current rate of nearly 1.3…
Capital Econ: Treasuries remain vulnerable to a recalibration of rate expectations
Mark Melin
Mark Melin is an alternative investment practitioner whose specialty is recognizing the impact of beta market environment on a technical trading strategy. A portfolio and industry consultant, wrote or edited three books including High Performance Managed Futures (Wiley 2010) and The Chicago Board of Trade’s Handbook of Futures and Options (McGraw-Hill 2008) and taught a course at Northwestern University's executive education program.