The Fed is Holding Down Long End of Yield Curve

Nathan Sheets, PGIM Fixed Income chief economist, visited with CNBC to provide his thoughts on the economy and Federal Reserve policy, particularly the Treasury yield curve.

Points discussed:

  • The flatness of the 10-year Treasury yield curve is getting the Fed pause
  • Factors holding down long end of the yield curve
    • Fed is taking out duration in the market
  • There is more worry in the bond market
    • A lot of manmade/policy-induced uncertainties
  • Economy has significant momentum–pace of investment is growing
  • Trade wars create a lot of uncertainties and could be disruptive for the economy
    • Tariffs put upward pressure on prices

Related: Bond Markets Watching How Trade Disputes Impact Rates

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