Government borrowing, Interest Rates, there is a zero correlation with it. But now i think rates are going up because of the fear that inflation will return and that the central bank will have to exit a lot faster than people think. It is a point to understand what is going on, it is not really the deficit, it is growth with inflation and reflation attached. We know the treasury had more to issue. Also to finance the unwind of the feds balance sheet. Some of this is International Investors stepping up from the markets and returning from where they came from. The yields overseas are starting to grind higher. The hedge and causes were some of the challenges will be. If you look at some of the differences such as hedging being and get a european investor, you cant get a real yield pickup getting into the tenure on a relative basis. Once you factor those hedging costs in. Full house in new york city today, joining me is matt hornback, kathy jones and mike. Matt, it went well. 258 billion.
The end of this year, is completely unprecedented. For 30 years, the theory hasnt worked. Borrowing, Interest Rates, there is a zero correlation with it. Right now, rates are going up because of the fear inflation bankreturn and the central will have to exit a lot faster than people think. I agree it is not the deficit, it is growth with reflation attack. Attached. Treasury has more to finance a wider deficit, but also to the unwind of the balance sheet. Investors this is returning back where they came from. The yields overseas are grinding higher, but the hedging cost is where the challenges have been. If you look at the differences between hedging as a European Investor coming into the human at ash u. S. Markets, it is no longer a track to. Once you factor the hedging costs in. Joining me around the table, jones and back, kathy mike. Matt, it went well. 258 billion and the world is still rotating. Fancy that, we knew about the supply from a year ago. Here it is, the treasury market d
Le we have the editor of the book report thanks for joining us were going to check on markets see how were set up heres the futures dow down 15, nasdaq down 20. S p down 5 coming off the huge rally to close on friday, another strong week of gains for wall street. How about the tenyear, 2. 65 last week. We begin the week at over 2. 7. Did you see that i think the futures are down. Thats a sticker shock to people tenyear at 2. 72. 30year, just a hair under 3 fiveyear under 2. 5 twoyear, 2. 15 wow. Lets get you caught up with stories were watching perhaps the biggest over the weekend, saudi arabias prince alwaleed has been freed. He was detained. We talked about it for the past two months with the corruption crackdown. Several other officials and saudi royals were rounded up and they were at whats known as the ritz prison. Youll get to see it the ritz prison and alwaleed described it as a misunderstanding there are no topics its just a misunderstanding its a key position we had it was a d
2 . 1. 6. Cpi is 1. 7 or that allows the fed to go slow. Gradually pushing inflation back to normal, we dont see anything that will push inflation to levels where becomes a market issue or forces Central Banks to accelerate rate hike plans. You should probably start to tighten when you see the whites of the oz of inflation the eyes of inflation. This isnt anywhere near the whites of anybodys eyes. We want some duration on portfolio, but too much duration is risk. We dont think this trend is going to be structural. It is transitory in nature. The bond markets continue to be distorted. It is extraordinary to see. We just talked about u. K. Inflation heading out, putting pressure on inflation rates all over the world. On markets are still not responding and appeared very stretched. Jonathan joining me around the table is George Rusnak of wells fargo, kathy jones, fixed income usategist, and coming to from atlanta is matt brill of invesco. You, lets start with inflation for the weekend whi
Comments out of theboe. You can see how the safety trade is not playing out with dollaryen higher and a mild risk off move after the Missile Launch it now back onto the dollar story. Gold going nowhere. Jonathan potential terrorism in the u. K. , several people injured in an explosion on a subway train in london. Police said they were treating it as terrorism on a number of people were injured, suffering facial burns and some were hurt in a stampede, according to the press association. No word of the whereabouts of the perpetrator. Station inen subway london was cordoned off as police investigated and north korea is another manchild launch Missile Launch in japan after the United Nations approved harsher sanctions against the regime while Rex Tillerson says these continued provocations deep in the north korean diplomatic and economic isolation. Joined by our chief agent economics correspondents. Editor forcutive international government. Walk three details as they come through in londo