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‘Train Wreck’ Economy or Red-Hot Inflation Is Big New Bond Call

  • Treasury investors divided on growth-versus-inflation debate
  • LongTail likes two-year debt, AlphaSimplex quant shorts bonds
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Schwab's Jones Sees US 10-Year Yields Topping Out at 3%-3.25%

A wild year on Wall Street has traders fretting one of two extreme scenarios will engulf the $23 trillion Treasury market ahead: Either a fresh bond selloff thanks to red-hot inflation -- or a sustained rally on mounting recession risk that sends yields back toward historic lows.

Market participants are butting heads over what big move will come next.