There’s little doubt that an interest rate surge of another 100-200 basis points would cause some serious woes for the economy.
At a minimum, such a move could choke off any possible recovery in real estate.
Morgan Stanley (via ZeroHedge), lead by JIm Caron, Head of Global Rates Strategy, has put together an amazing presentation, explaining why significantly higher yields are right around the corner.
We believe the start of the move to 4.50% UST 10y yields
and a steepening of the curve is right around the corner.
Globally, we expect a series of stronger economic data in the
months ahead plus a bearish seasonal bias for bonds to
contribute to the rise in yields. In fact, we argue that yields
may initially burst higher once they break the top end of the
multi-month trading range. Higher yields, yes, we can get
there from here.
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