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Gundlach: 10-year yield could go to 2.2%

  • Unless he's talking about hitting 2.2% today, it's not such an outlandish prediction given the big rally in Treasury prices of late. On the session, the 10-year yield is lower by a full seven basis points to 2.33%.
  • As for 2%, Gundlach - speaking on a CNBC interview - doesn't think we'll get there, but momentum is a hard thing to judge, and there's plenty pushing yields lower right now.
  • TLT +1.2%, TBT -2.4%
  • ETFs: TBT, TLT, TMV, TBF, EDV, TMF, TTT, ZROZ, SBND, TLH, DLBS, VGLT, UBT, TLO, TENZ, LBND, TYBS, DLBL
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Comments (14)
  • alexscagileri
    , contributor
    Comments (35) | Send Message
     
    Too bad he missed the last rally then. Sounds like he's going to miss the current one too.
    15 Aug, 01:39 PM Reply Like
  • User 18510422
    , contributor
    Comments (63) | Send Message
     
    the 2 largest positions in his flagship fund are treasuries and this has been the case since at least the beginning of this year
    15 Aug, 03:15 PM Reply Like
  • alexscagileri
    , contributor
    Comments (35) | Send Message
     
    We hit 2.2 today!
    15 Aug, 04:46 PM Reply Like
  • economist11
    , contributor
    Comments (63) | Send Message
     
    2.2 percent is a negative real return on 10 year notes. This has to be buyers that are looking to park cash and not those looking for a return. It has all the signs of a panic, and panics never last long.
    15 Aug, 02:00 PM Reply Like
  • chopchop0
    , contributor
    Comments (3410) | Send Message
     
    This bull market in equities sure has been.

     

    It's funny to see how many people have been predicting the demise of treasuries the last few years. So many TBT investors/shorts have really been burned trying to figure this out
    16 Aug, 02:52 AM Reply Like
  • johnymin
    , contributor
    Comments (2) | Send Message
     
    actually he has been calling more lower rates all year
    15 Aug, 02:02 PM Reply Like
  • metalhead
    , contributor
    Comments (69) | Send Message
     
    A lot of bond bears are getting their fur scorched. Ditto for the geniuses at all the major investment banks who predicted a 3.5% 10 year yield by now. Perhaps that was just a way to fade their clients.

     

    Given that the US economy does not appear capable of growing at much more than a 2% annual rate as reflected by GDP statistics, is this really that surprising?
    15 Aug, 03:06 PM Reply Like
  • leopardtrader
    , contributor
    Comments (1018) | Send Message
     
    10 year still gonna get above 3% later this year
    15 Aug, 03:14 PM Reply Like
  • VTH
    , contributor
    Comments (149) | Send Message
     
    How are you so sure?
    15 Aug, 07:47 PM Reply Like
  • metalhead
    , contributor
    Comments (69) | Send Message
     
    It is possible but will take a pretty serious sell-off over the last four months of the year, including Sept/October which are seasonally strong months for treasuries.
    15 Aug, 03:18 PM Reply Like
  • MisterJ
    , contributor
    Comments (680) | Send Message
     
    S/t we are quite overbought and a pull-back can be expected in treasuries. However I do not see rates rise meaningfully any time soon.
    15 Aug, 05:04 PM Reply Like
  • realitician
    , contributor
    Comments (19) | Send Message
     
    IMO many investors think it's too late to get into the equity bull run. That combined with fears over the rippling effect of Mideast and Ukraine conflicts is driving people to the safe haven of US treasuries (but strangely not gold). I believe yields will continue to shrink until there is more resolution to global conflicts and the stock market corrects enough to attract more appetite for equity risk.
    16 Aug, 08:41 PM Reply Like
  • The Last Boomer
    , contributor
    Comments (898) | Send Message
     
    I was buying TLT when the 10-year was between 2.8 and 3 at the beginning of the year. These were my reasons:
    - GDP growth is lackluster;
    - traders mistakenly think that the Fed drives the long-term rates when they are predominantly market-driven;
    - as the big guys get out of the short end that is actually controlled by the Fed, they still have to hold bonds and they'll buy the long end;
    - there has been a 33-year trend of declining interest rates that was not about to be broken in this slow economic environment;
    - and the most important one: 100% of the economists predicted rising interest rates.
    Now, buying is just half of a good trade. It remains to be seen if I'll pick the right moment to sell and protect the gains. I rarely get the timing right.
    17 Aug, 12:50 AM Reply Like
  • VTH
    , contributor
    Comments (149) | Send Message
     
    The Last Boomer, Excellent reasoning, especially, about the long bond rates, its definitely not being determined by FED. 2.2% may not be bad trade for you.
    17 Aug, 09:32 AM Reply Like
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