Goldman Sachs The Markets
The market’s rate expectations
Oct 13, 2023
This podcast explores the recent movements in the bond market, including falling prices and rising yields. It discusses the impact of unexpected geopolitical tensions in the Middle East, the potential implications of the Federal Reserve's stance on longer-term yields, and the market's response to firmer-than-expected CPI data. Additionally, it explores the recent increase in Treasury bond yields and its impact on the market, analyzing the connection between the rise in yields and positive reports on hiring and consumer spending. The podcast also discusses the bond market's reaction to the September CPI number and debates treasury supply and demand, addressing the market's sensitivity to price data and whether it can digest the large deficits and treasury supply in the US.
08:08
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Quick takeaways
- Unexpected geopolitical tensions and Fed speaker statements led to a rally in treasuries and a fall in yields at the beginning of the week.
- Rising Treasury bond yields reflect the market's adjustment to a stronger than expected economy, but uncertainty remains regarding the future direction of interest rates.
Deep dives
Treasury Market Response to Geopolitical Tensions and Fed Speakers
The early part of the week saw a rally in treasuries and a fall in yields due to unexpected geopolitical tensions in the Middle East and statements from Fed speakers suggesting a potential end to interest rate hikes.
