What All The Big Investors Are Chattering About Lately

From Dan Greenhaus at BTIG:

If our conversations with clients and incoming phone calls from both clients and reporters are any indication, the move in Treasuries is generating quite a bit of discussion among market participants. As we have noted in past Bedtime notes, any realistic and honest valuation model for Treasuries would show, in some cases, severe overvaluation at several points on the curve. Indeed, if some had their way, the yield on the 10 year would go closer to 2.75% than 2.50%. However the impact of the FOMC has been noticeable, keeping yields well below any fair value metric.

If you’re not up on the latest gyrations in the Treasury market, it’s basically this…

Since early November, yields on the 10-year US bond have basically been stuck just above or below 2%.

In the last several days, they’ve shot to above 2.3%.


Anytime a move happens fast like this, people chatter, but the story is basically as Greenhaus states above.

By any reasonable measure, yields were too low, to long given other market conditions and now they seem to be playing catch up. Anyone talking about bond vigilantes or inflation or whatnot should be ignored.

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