This episode explores the dramatic rise in 30-year Treasury yields, focusing on the events of a single week where yields increased by roughly 60 basis points. Against this backdrop of market volatility, the panel discusses the lack of clear fundamental factors explaining the sell-off, with the President's tariff announcement identified as a potential catalyst. More significantly, the discussion highlights a tectonic shift in Treasury market demand, transitioning away from the Fed, US banks, and foreign investors towards more price-sensitive demand, leading to higher term premiums. For instance, the panel analyzes the impact of this shift on foreign demand for Treasuries and its implications for the yield curve. In contrast to the significant yield movements, the panel notes that other market functioning metrics, such as the Treasury cash futures basis and repo markets, remained relatively stable, although swap spreads exhibited dramatic volatility. The episode concludes by examining the weak March CPI report and its implications for inflation markets, emphasizing the uncertainty surrounding future tariff developments and their potential impact on both inflation and economic growth.
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US Rates – There’s no crying in basis | At Any Rate | Podwise
