By: Russ Kamp, CEO, Ryan ALM, Inc.
I warned back on October 24th, that the Fed’s inaction might prove to be a head fake for Treasuries, as mounting inflationary pressures hadn’t yet been tamped down. Well, U.S. Treasury yields are once again rising, as the data below highlights:
Current Treasury yields remain below decade highs established in late September, but further complacency on the part of the Fed may yet drive rates to new decade highs. Instability within the AI trade and higher rates could make for a very interesting year-end.
Any chance this might produce a tightening in corporate spreads?
No, I believe that the AI credit crunch will lead to further widening of spreads.