Little to No Catalyst Is Needed to Push U.S. Yields Down Again
- Ultra-long bonds idea offers a respite that may not last long
- Academy’s Farren says brace for Treasury rates to keep falling
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The current respite in the relentless drop in yields that’s gripped the $16 trillion Treasury market isn’t likely to last for very long.
All of the ingredients needed to keep the bond rally going, and thus push yields even lower, are already in place: U.S.-China trade tensions, weak global growth, concerns about Brexit and maybe a spice of Argentina or Hong Kong turmoil. None of them are likely to be fully resolved in the next few weeks or months, and even the possibility of the U.S. issuing 50- to 100-year bonds feels like just a temporary salve, said Tony Farren of Academy Securities Inc.