Jim Bianco at Bianco Research thinks there is one more push higher in long-term yields. Then if sentiment is extreme, he will go long.
Thoughts From Bianco
Going to a Neutral Stance
No Capitulation
A Chance to Go Long
Risk-Reward Thinking
I like this kind of thinking. Trying to get the last ounce out of a trade is often wrong. It’s possible a near-term top in yields is already in. Perhaps not.
The Fed has surely made a mess of things. So has the Biden administration with sponsored inflation in everything he does (excessive fiscal stimulus, poor energy policy, regulatory madness, student loan cancellations, Inflation Reduction Act, tariffs, etc., all highly inflationary)
But no one knows what the market will do. So, for Bianco, it’s now wait and see.
Jim did not say, but I suspect the next move lower may be a counter-trend. To those who suggest inflation is transitory, I suggest the recent decline in year-over-year inflation may be what’s transitory.
He is not trapped in a one way funnel. He was short and is now looking to go long US Treasuries. I suspect for a trade, not a long-term bet.
But “Will discuss more when/if we get above 5.00%.”
Thanks Jim! That was understandable guidance people can use.
In case you missed it, here is some guidance we can do without: Forward Guidance: The Fed Sounds Like a Wizard Reading Chicken Bones