Bloomberg Surveillance
Surveillance: Kaminski on a 6% 10-Year Yield
Aug 22, 2023
Kathryn Kaminski says a 6% 10-year yield is not crazy. Vincent Reinhart says current yield levels are sustainable. Chuck Grom says signs of a discretionary recession are emerging. David Rubenstein says fixed income returns are better than a year ago. The podcast also discusses market signals, higher rates, and the sustainability of yields, as well as the shift from services to goods and the state of pensions in the US.
26:54
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Quick takeaways
- The market is aligning with short signals in fixed income, indicating the potential for higher rates to persist.
- Market participants are adapting to the changing landscape by recognizing the importance of short-term returns and long-term cash flows.
Deep dives
Short signals and market agreement in fixed income
The podcast discusses the recent short signals in fixed income and how the market is starting to agree with them. Despite short signals being present throughout the year, the recent market reaction and the alignment of fundamental players suggest the potential for higher rates to persist. The podcast explores the transition period as the yield curve flattens, indicating a shift towards short-term returns. The discussion also touches on the potential implications of a steeper curve and the realization of why holding long-term debt may not be favorable in the current environment.
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