3min chapter

The Macro Trading Floor cover image

Debt, Demographics & Deflation Ahead | Raoul Pal

The Macro Trading Floor

CHAPTER

What's Your Best Risk-Reward Market Opportunity?

The bond market is the most decoupled it's been from the business cycle in history, regardless of what inflation is. I think this is the illiquidity in the bond market that has been caused by the Basel III regulations and a bunch of other issues. So when I look at inflation expectations, they're relatively benign,. But the bond yield is at 4%. Now, if I look at the year-on-year fair rate of comparison versus the ISM, it's currently pricing the ISM at 73. And it should be down at where the ISM is now, about 50. And that would mean bond yield should be at 1.5%. It doesn't mean

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