I’ve spent a lot of time in the last 16 months trying to think for myself on why slower and lower for longer was the better option than living in perpetual fear of a redo of the “rates rising” call we made (short the Long Bond and Gold) in 2013.
Thank god I have great, data dependent, teammates. Without them grinding through the data on big sequential head-fakes, it would have been next to impossible to explore the real possibility that trending US and Global Growth would continue to slow in the 2nd half of 2016. This textbook fade by the Fed delivers the #1 catalyst for stocks, bonds, and Gold = #GrowthSlowing.
Remember Old Wall hyperventilating over Fed rate hikes?
Does this look like a "rates rising" chart to you?
BOND BEARS ARE GETTING ABSOLUTELY CRUSHED IN 2016.
That's why they're all are running back to their caves this morning as both US and European yields pull back from the top-end of their immediate-term risk ranges (again); German 10s -6bps to -0.06%; UST 10yr 1.64% with a risk range of 1.55-1.72%.
Bond Proxies rocked the shorts yesterday too – Utilities (XLU) +2% on the day to +17.1% YTD.
As Fed pivots back to dovish, #GrowthSlowing remains the only bull market catalyst left.