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TLTBEARISHFLIPPEDEXCESS RETURNS · BULLISH IN AUGUST → BEARISH IN AUGUST

Simple inflation model says avoid bonds

The guest presented a systematic model that avoids owning bonds when their daily inflation nowcast is above 2%, which has captured the majority of bond returns historically.

EXCESS RETURNS CHANGED ITS VIEW

BULLISH FOR 4 WEEKS, THEN THE TURN
THEN2 AUG · BULLISHJim Paulson argued that while restrictive policy initially hurts bonds, a 17-week lag leads to a bond rally as economic momentum fades and yields fall.NOW31 AUG · BEARISHThe guest presented a systematic model that avoids owning bonds when their daily inflation nowcast is above 2%, which has captured the majority of bond returns historically.

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