In this week’s newsletter, we’re going to provide you with an inflation update based on some of this week’s important data releases and also share some general thoughts on risk assets and liquidity...
History teaches us that it is not until the yield curve steepens that the problems start. Why do near term yields collapse? because demand collapses. Long term rates stay about the same but the yield curve steepens as it anticipates growth 15 months ahead. We still have a long road to travel, maybe 18 months and a 50% drawdown. The only profitable trade will be Eurodollar futures. You used to recommend them Raoul, time to do so again.
More cowbell... https://www.youtube.com/watch?v=5kMw8HiMEjU
History teaches us that it is not until the yield curve steepens that the problems start. Why do near term yields collapse? because demand collapses. Long term rates stay about the same but the yield curve steepens as it anticipates growth 15 months ahead. We still have a long road to travel, maybe 18 months and a 50% drawdown. The only profitable trade will be Eurodollar futures. You used to recommend them Raoul, time to do so again.