Fed’s Balance Sheet Unwind to Steepen 5s30s Curve: Citi
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
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Jabaz Mathai (Citigroup Inc)
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UUID: 7947283
(Bloomberg) -- As the Fed’s balance sheet normalization overshadows rate hikes into August, term premia in the curve’s long end will rise, Citi analyst Jabaz Mathai writes in July 28 note.
- Long end will be “relatively unanchored” because of “supply uncertainty” increasing term premia; curve will stay “relatively anchored” from 1Y to 5Y sector
- 5s30s steepener “still has a lot of room to run”; 2Q flattening implied policy mistake, now being “logically unwound”
- Confident that core PCE will “keep a safe distance” from 2% goal; Fed close to done with short rate adjustments, will let balance sheet run-off “do the heavy lifting for normalization”
Alert: HALISTER1
Source: BFW (Bloomberg First Word)
People
Jabaz Mathai (Citigroup Inc)
To de-activate this alert, click here
To modify this alert, click here
UUID: 7947283