美国国债拍卖收益率创2001年以来新高

I like rates here. I mean, as a security there is income in fixed income. There is also the ability for capital appreciation. If the economy slows down, fixed income is providing you that hedge. Uh, but since you bring up the auction, you know, the auction was actually fine. We look at bit to cover. We look at end user demand. Dealers have to take it all down. That would create a lot of angst because we have a ton of debt.

The U.S. government, global governments, corporate. If they was in demand to meet this supply, I think then there would be angst. But right now the auctions will find interest rates have risen. But I think if you zoom out and you go back to the late 90s or the pre Lehman time period, actually interest rates don't look particularly odd. I think they are pricing in all the supply that's coming in their pricing and potentially higher productivity through AI.

But there is still I would go back to we're seeing inflows into fixed income. So there's demand for treasuries. This demand for all the corporates now at wider spreads at higher new issue concessions. So there's a price that the market is demanding for all the supply, but the demand is there at a price. And I think that's what we're we just have to get used to the new normal of better, you know, higher interest rates.

Who buys our Treasury securities these days? Great point because I think it has changed in the last ten years. Uh, it used to be foreign central banks. It used to be the fed. And now it's what I call price sensitive buyers. And which is why these interest rates have risen, what we call term premium, which is how much more you should get paid to extend out the curve that has risen. So who's buying it? It's people like us.

It's asset managers. It's what the fed calls households, which is not necessarily the average person on the street. But if you have any money in a retirement account or in a brokerage account and you put it in a fixed income fund. So those are the largest buyers. But I would say U.S. banks are biased and foreign investors are still buying treasuries, given the yield, given the fact that the fed is credible. I think that there's still that that, uh, demand from the rest of the world is just smaller than it was ten years ago.

This, uh, Jackson Hole thing is going to be, I think, important for the market coming up later this month. It's so important that we're sending Tom Keene and Michael McKee at the Jackson Hole here to cover for us. What are you looking for? I'm very jealous. I know Jackson Hole is like the ultimate holy grail. All these central bankers get there. They debate topics. So, uh, Dom. Enjoy. Uh, it's it's an important, very important, um, you know, meeting, I think particularly right now because there's uncertainty around economic outlook.

There always is now there's uncertainty about the Fed's reaction function. And it's not just one reaction function. Reaction function is for people that don't know. It's just how the fed reacts. Do we know how the fed is going to react to a certain piece of economic data? Is that what we're talking exactly? Yes. I think we want to understand as data comes in, the fed doesn't know the data and nor do us, but as the data comes in, how would the fed react?

Do they? Is there a trigger point and do they need inflation to get back to 2% this year. That's a high bar. Do they just need it to decelerate? Which is it is doing that to allow them not to hike. So I think getting a sense, I know, to a wash has not given us much of a sense of his reaction function, but other fed officials have. So what I'll be watching is his speech. Other fed officials on their reaction function this weekend.

Everyone's going to have good history. I love of Baron. Saturday morning is just is very valuable. Okay, fine. And they're going to all analyze spreads the difference between the two year the ten year yield, the three month, the 30 year. How does premium misery use spreads to get a confidence to buy the next marginal bill note bond. So you're talking about essentially the yield curve. So has the curve steepen out enough.

Is it a constructive tool for you or is it just a media frenzy. Oh it's an important tool. I would decompose it further to say, is this real rate or is it inflation? What we're finding is its real rate, which makes us like further out the curve a little bit more. So. Um, yes. You know, I think the curve has deepened. The market is charging is being you more or is is asking for more real rate. And that makes me feel like the fed is still credible.

The market expects inflation to come back down. I think these spreads are starting to look attractive to extend out the curve. I want to ask one question. We got to go to Colonel Sanders here. We look at the Eastern Mediterranean. What was it like when you got into Lady Shri Ram College in Delhi? Like, that's the most prestigious economics program, right? It's a good program. It's all of us debating, uh, economics. And actually, it was in the late 90s.

We were debating productivity. So some of what we're going through now is I go back to when I was in school. What does new technological, you know, evolution. What does it mean. Does is it disinflationary. Does it raise our star. The debate that do we need to capital deepening with all this AI CapEx. Exactly. And you know there'll be winners and losers. But from a macro standpoint this is actually it tends to be disinflationary.

It doesn't tend to result in massive job losses. But there's a transition period. And we're sort of I think in that moment right now. So um, I go back a lot to when I was studying economics and it's useful.