Long-duration Treasuries set to outperform
The guest argued that long-duration US Treasuries and TLT will be the best-performing asset class by the end of the year as yields peak and economic demand destruction triggers Fed rate cuts.
The argument
The guest expects a growth scare in Q2 to halt Fed rate hikes, leading to rate cuts in Q3 or Q4. He notes that technical cycles suggest treasury prices will bottom and yields will top within the next month or two.
The thesis, stress-tested
✓ What validates it
- ✓30-year Treasury yields peak and begin declining
- ✓Fed signals a pause or pivot to rate cuts in H2
▸ Risks discussed
- ▸Fed delays rate cuts if inflation remains sticky
- ▸Technical cycle lows fail to hold
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