Treasury Yields Could Be on the Rise

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.

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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.