HALISTER1: UST 2s5s Curve May Steepen Before It Flattens, CS Says

UST 2s5s Curve May Steepen Before It Flattens, CS Says

(Bloomberg) -- Transition from monetary to fiscal easing will eventually require “more meaningful tightening as the inflation backdrop adjusts,” however Fed “is likely to wait for some clarity on fiscal policy before stepping on the accelerator,” Credit Suisse strategists led by Praveen Korapaty say in note.
  • They recommend zero premium conditional weighted 2s5s steepeners “given the uncertainty”
  • 10Y yield could reach 2.6% on term premia adjustments alone, 3% if Trump “focuses on deficit spending, and ignores some of his other promises, which could be quite negative” for economy
Alert: HALISTER1
Source: BFW (Bloomberg First Word)

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Praveen Korapaty (Credit Suisse Group AG)

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