Markets
Seismic Bond Shift Has Traders Watching Yield Curve’s Moves
- Market has priced big rate cuts and curve remains inverted
- Gross and Bassman are calling for a steeper yield curve
This article is for subscribers only.
Bond traders are growing convinced that US Treasury yields are on the brink of returning to the way they’ve traded for most of their existence — it’s the how, why and when of the normalization that keeps financial markets bouncing around.
The shift many investors bet is now underway would see the interest rate on 10-year Treasuries rise above those on US two-year notes, a steepening of the so-called yield curve that would mean banks and investors get rewarded for the risk of lending money for longer periods as is typical.