Our perspective on global micro event and strategies.
As an investment director in Investment Products and Strategies, Amar works closely with investors to help ensure the integrity of their fixed income investment approaches. This includes meeting regularly with fixed income investment teams and overseeing portfolio positioning, performance, and risk exposures, as well as developing new products and client solutions and managing business issues such as capacity, fees, and guidelines. He also meets with clients, prospects, and consultants to communicate our investment philosophy, strategy, positioning, and performance.
It’s been a volatile ride for the US fixed income market through the first half of 2021. After interest rates seemed to be more or less “renormalizing” in their climb back to pre-pandemic levels, the US Treasury market rallied: In the span of three months, the yield on the 10-year note dropped from 1.74% on March 31 to 1.45% on June 30.
To many market participants, this downward move may seem counterintuitive. US economic activity has continued to pick up with the widespread, successful rollouts of the COVID-19 vaccinations. Accommodative monetary policy along with generous fiscal policy should be a strong tailwind to economic growth into the second half of 2021 and beyond. And inflationary pressures have clearly increased over the past few months.
In theory, all of this should translate into higher interest rates, but that hasn’t…
When Janet Yellen was confirmed as US Treasury Secretary in January 2021, questions inevitably resurfaced as to whether the Treasury should begin issuing a 50-year or even a 100-year ultralong note.
Just a few years ago, the Treasury’s debt managers, in consultation with the Treasury Borrowing Advisory Committee (TBAC), reviewed the potential issuance and concluded that it would not meet the Office of Debt Management (ODM)’s mandate of financing the government at the lowest possible cost of debt. Moreover, an ultralong note would present a challenge to the Treasury’s goal of “regular and predictable” issuance.
My purpose here is not to advocate for or against ultralong issuance, but rather to…