FAST FIVE: One Bank Turn Apocalyptic: "The Fed Will Inevitably Move To YCC" As "Rates Are No Longer Anchored"
[Insert Bloomberg] And yet, it's very likely that next week this massive inflow won't be repeated.
In fact, it's far more likely that next week we will see a massive outflow because as Hartnett notes, “the price is now right”: he points to the >100bps rise in 10Y TSY yields since Aug 4th low – as a reminder the plunge in 10Y prices since last March has been the 2nd worst bear market for bond in recent history… .
has created an addictive Wall St-Fed dependency culture (everyone bullish) and beginning of Main St-Treasury dependency culture, which will spiral higher with $8tn US govt spending for stimulus checks, welfare, financed by $8tn Fed balance sheet.
and more importantly according to the rates strategist, means that rates are no longer “anchored”; Indeed, the best measure of interest rate uncertainty is 10-year Treasury term premium and it has surged by 120bps in the past 12 months.
and what to do ahead of the Fed's historic nationalization fo the entire bond market.