We are starting to price in the possibility of increasing inflationary pressures when making decisions on our bond holdings. We now see a bigger chance the Fed will hike rates three more times and Treasury yields will continue to rise.
We're bullish on longer-term Treasuries because inflation is under control. We're not expecting any surprises from the Fed beyond what is already priced in. Treasuries at these levels are more likely to rally.
The upside of Treasuries is looking heavy given the looming auctions.
Inflation is under control and inflationary pressures are subdued. We are looking for opportunities to get into the market, preferably in Treasuries maturing in five years or more.
Treasuries are near the levels where investors think they offer value. Core inflation looks calm, so rising oil prices are primarily a threat to growth as they are like a tax hike for consumers.
These are very attractive levels to buy. Investors will take a weaker durable goods number as an excuse to get into the market.
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