Scott Thiel, a deputy chief investment officer of fixed income at BlackRock, was on “Bloomberg Daybreak: Europe” to discuss the current state of Treasury yields with respect to their movements as a result of trade tensions and Federal Reserve policy.
Here were the points discussed during the interview:
- Risk-free rates are doing better as a result of the unclear motives regarding trade tensions
- Market fundamentals within the U.S. are solid
- Federal Reserve is unclear as to the direction of the trade policies, which makes it a difficult environment to implement policy adjustments — uncertainty weighing in
- There is a 50 to 75 basis-point spread in terms of market predictions versus Fed predictions on the next interest rate hikes
- It will be important to see how the rate hikes impact the inflation trajectory in the next two years
- The Fed could basically be on autopilot in terms of economic policy
Click below to watch the full video:
For more trends in fixed income, visit the Fixed Income Channel.