Bloomberg Surveillance Single Best Idea with Tom Keene: Ira Jersey & Pat Haskell
Apr 9, 2025
The discussion delves into the Federal Reserve's complex role in the short-term fixed income market, emphasizing the need for traditional measures and bank flexibility in Treasury purchases. The traders analyze current market tensions and the impending risks of recession, while unveiling potential investment opportunities. They focus on the appeal of essential services and point out a New York City bond as an undervalued asset worth considering. Tune in for sharp insights into navigating today's financial landscape.
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Fed's Actions
- The Federal Reserve should return to traditional open market operations, like after the 2019 repo issues.
- This involves overnight and one-week repos, allowing balance sheets to expand.
Treasury Regulations
- The FSOC should eliminate the supplementary leverage ratio for Treasuries.
- This incentivizes banks and dealers to purchase Treasuries, expanding balance sheets.
Trading Strategy
- Fade emotion when trading; consider the likelihood of a recession and lower Fed rates.
- Buy high-quality spread, focusing on essential services unaffected by global supply chains.