How to Play the Unprecedented Move in Treasuries

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Aug. 26 (Bloomberg) -- On today's "Chart Attack," U.S. Trust BofA's Chris Hyzy and Bloomberg's Adam Johnson look at the unprecedented move in Treasuries. They speak on Bloomberg Television's "Street Smart." (Source: Bloomberg)

Today we have a pair of charts that will make you smarter.

We are focus on bonds.

Bond traders have been hemorrhaging money.

Give us a little contact.

When you have the largest fire in the fixed income market being the federal reserve, the dynamics obviously change.

You're looking for the rate of change, and not just the level of the yields.

We have gone very far very fast.

The premonition is what is the top and?

-- end?

Where is this going to start?

If you look at the rate of change in the last five decades or so we have had the biggest move that we have ever seen.

100 1920 basis -- 119 basis.

This is what you're talking about, the percentage changed in the yields.

That is the most important.

. the magic number is 3%. the actual rate of change and how quick it has happened is the second phase of this.

We think yields will top out somewhere around 3%. this has a lot of implications for the mortgage market and the economy as a whole.

You might actually see more flows come out of fixed income.

We nearly went up there.

We are starting to back off.

What is magic about 3% for you?

A zero percent interest rate policy.

You have 3% with the 10 year.

May be 4% the 30 year.

It is a steep overall curve.

When you hit that 3%, that is almost doubling off of the lows.

We remain at that level.

That is when you have to look at housing.

That is when it gets extended.

This text has been automatically generated. It may not be 100% accurate.

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