FICC Focus Macro Matters: Yield-Curve Steepening With Mizuho’s Konstam
Sep 4, 2025
Dominic Konstam, Head of Macro Strategy at Mizuho Securities and a veteran in economics and rate strategy, joins Ira Jersey to delve into the complexities of the yield curve. They explore how term premium influences risk assets and discuss Mizuho’s optimistic macroeconomic outlook. Konstam also shares insights on how the Trump administration's policies may continue to affect the dollar and overall economic strategies. Get ready for an engaging discussion that unveils the intricate connections within the financial landscape!
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From Academia To Cross-Product Strategy
- Dominic Konstam traced his shift from academic economist to sell-side strategist across Credit Suisse, Deutsche Bank and Mizuho.
- He described evolving his focus to cross-product analysis linking rates with equities and credit through term premium research.
Why Term Premium Matters To Risk Assets
- Term premium splits nominal yields into a risk-neutral rate and an added premium that markets demand for duration risk.
- Rising term premium can push up longer yields independently of the economic cycle, forcing other risk assets to compete for return.
Real Yields Drive Term-Premium Volatility
- Most term-premium volatility shows up in real yields rather than inflation break-evens.
- Elevated real yields reflect risks like tariffs, fiscal stimulus, and perceived threats to Fed independence.