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The backup in Treasury yields - with the 10-year hitting 2% today for the first time in nearly a...

The backup in Treasury yields - with the 10-year hitting 2% today for the first time in nearly a year - is a buying opportunity, according to Capital Economics' John Higgins. One datapoint of interest: In 7 major tightening cycles since the early 1970s, the trough in Treasury yields occurred an average 7 months before the first Fed Funds tightening.
Comments (6)
  • OK, now I understand .... because the fixed-income markets behaved a certain way before, they are 'likely' to behave that way again.

     

    Not on your life. 'Quantitative Easing' no longer provides the Fed with the ability to 'engineer' monetary policy - - the capital markets are, once again, about to show the Fed who "really sets interest rates."

     

    The trade of the decade is shorting fixed-income .... when putting the trade on, the further out the curve one can go the better.
    28 Jan 2013, 04:13 PM Reply Like
  • I doubt the current cycle has much to do with the 7 others since the 70s. This could be the end of a 30+ year bond market and certainly nearing the end of the worldwide debt superbubble. If treasuries are a buy they must be in shorter time frames only....
    28 Jan 2013, 04:16 PM Reply Like
  • It all makes total sense that yields would climb, maybe suddenly. Except that Japan's been doing this for 25 years and it hasn't happened to them. I'm no expert, but I have asked and I have yet to have anyone give me an explanation as to why the USA will be different. Japan's 10-year is at about .8%. Our debt will keep climbing like theirs. Our people will keep aging like theirs. Our politicians will remain gutless to change like theirs. Our entitlements will crowd out other investments like theirs. And on and on. What will be the catalyst that will cause all that $9 trillion to start moving out of US treasuries in a big way? I think the operative advice is "don't fight the Fed."
    28 Jan 2013, 04:29 PM Reply Like
  • how about inflation?
    28 Jan 2013, 06:19 PM Reply Like
  • If Bernacke says the rates are staying low. They are staying low.
    28 Jan 2013, 04:32 PM Reply Like
  • the rates can stay artificially low but the bond market may not necessarily follow the same pattern...
    28 Jan 2013, 06:21 PM Reply Like
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