Rates are famously low. Some observers, including our UCLA classmate Bill Gross, who runs the world’s largest bond fund, has claimed for several months (erroneously as it turned out) that rates on US debt will spike. If you own bonds, that means your prices goes south. If you are about to refinance, that means you better be quick.
What is reality ahead? US rates will now begin to come under pressure. If one were of a trading mentality, one would short the US 10 yr (2.99%) and buy the 10 yr Ger Bund (3.03%) Spreads are safer than outright.
(We grew up in this industry counting on price discovery being left to the free market, devoid of planners. That is why predicting the direction of interest rates was so much easier in the old days.)
Robert Craven
What is reality ahead? US rates will now begin to come under pressure. If one were of a trading mentality, one would short the US 10 yr (2.99%) and buy the 10 yr Ger Bund (3.03%) Spreads are safer than outright.
(We grew up in this industry counting on price discovery being left to the free market, devoid of planners. That is why predicting the direction of interest rates was so much easier in the old days.)
Robert Craven
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