Bond Sentiment: Treasury Yields May Drop

I am definitely on board with the idea that longer dated Treasury yields are headed lower, and I am beginning to warm up to the idea that this could be meaningful, tradeable move.

Now from the missives of David Rosenberg, we have the Barron’s Big Money Poll from Fall, 2009. The most loved asset class: equities. As it turns out, Treasuries are the least loved and the most hated - winning both titles by a long shot. See figure 1.

Figure 1. Barron’s Big Money Poll

Very interesting.

Subscribe by RSS Subscribe by Email

Comment by steve

2009-11-21 16:01:16

You’re being fooled by the Fed, which is currently engaged in quantitative easing — the deflationary trends you are seeing are quite likely the work of the Fed purchasing treasuries and otherwise adding to its bulging balance sheet. The tea leaves that are treasuries cannot be read for anything until the Fed is done w/ it’s program, which I last hear will be April 2010. Ask yourself why mortgage rates are at *all time lows* yet the housing market is much riskier than it was a year ago — when mortgage rates return to “normal” — ie likely where they were in Sept. of last year, 6.5% 30 yr fixed, give or take a point, we’ll know the fed isn’t pulling strings behind the scenes.

Reply to this comment