Brian Chappatta, Columnist

Behold the Most Volatile Call for Bond Yields

There are the Treasury market bulls and bears. And then there’s John Dunham.

December 4, 2019 at 12:00 PM UTC

Brian Chappatta is managing editor of Bloomberg News' leveraged finance and distressed debt teams. He was previously managing editor and team leader of its wealth group. Before that he was a Bloomberg Opinion markets and finance columnist and a bonds reporter for Bloomberg News.

First the bear. Then the bull.
Photographer: Alex Kraus/Bloomberg

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Stay in one part of the market long enough and you’re bound to know which strategists tend to be bullish and which ones seem permanently bearish. U.S. Treasuries are no exception. Just consider these two divergent views from the ranks of the Federal Reserve’s primary dealers:

Steven Major at HSBC Holdings Plc is among those who have long believed in lower-for-longer U.S. interest rates. He and I talked in mid-2016, when Treasury yields hit all-time lows, about how structural forces such as an aging global population create a nearly insatiable demand for safe fixed-income assets. He predicts the benchmark 10-year yield will finish 2020 at around 1.5%, compared with a median estimate of 2% in a Bloomberg survey. That’s bullish.