Treasury yields rose sharply in the second quarter but investors now look to low inflation and slow economic growth to contain to contain the move higher, Bloomberg News reports.
“If you look at inflation, the kryptonite for bond guys, we just don’t see it,” said Jack McIntyre, a money manager at Brandywine Global Investment Management , in the article. “We’ve gone through an adjustment where yields have gone higher. I don’t think yields will go significantly higher.”
“At least one threat to the Fed’s largess continuing—inflation—is well in check. June’s consumer-price index reading, due Tuesday, may rise to 1.6% year over year, from 1.1% two months previously,” The Wall Street Journal reports. “But it is unlikely to go much beyond that in coming months and remains historically low.”
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Full disclosure: Tom Lydon’s clients own TLT.