CFR专家：美债波动加剧，建议持有现金或短债

Rebecca Patterson, the fancy title Writing Daily. Great work with Sebastian Mallaby, senior fellow at the Council on Foreign Relations. I don't care because it's Bloomberg money. Wonderful to have you here long ago and far away at Bessemer Trust. I came in and I said wonderful pontificating to wealth management people. If you were at Bessemer Trust today, how do you handle this bond market? You know, I would have been nervous about bonds for some time.

I wrote an op ed in the New York Times in January last year, expressing some concern about longer term bonds, because the policies we were getting were going to increase the deficit, increase growth, which is a good thing, but push up inflation for likely higher rate. So this isn't a surprise. What's happening? I think the surprise this week is now we have volatility in those rates thanks to the Treasury. So I would prefer to be in cash or short term fixed income and other types of diversified.

Dare I say it gold. Here's the canard of the business folks, bring up the chart, please. This is for Rebecca Patterson. Wall Street and Rebecca Patterson talk differently than mere mortals. If you own the TLT is out 20 years plus like a lot of retail does, picking up that yield its price down from Covid? It has been a crater of yield up price down in your world. What's long term seven year duration not 20 year when you're looking at retirement and wealth management.

Yeah I think even shorter duration like money markets right now. So the yield pickup you have by owning a longer term bond right now. Yes you get something for it. But is it worth the risk. And right now I haven't thought it is. What I would say though is for retail investors, if you lose money when rates going up, it does depend on how fast the rates go up. And it depends what the yield is. So if I'm getting a high yield, say the 30 year it's 5.24% and yields continue higher, but very slowly.

I lose money as the prices fall and the yields go up. But I'm making money on that coupons, so it depends how quickly this move happens. The envelope at home I'm sorry to get the envelope at home. And 100,000 has become 97,000. Yeah $38. And then for your wealth management the next month, it's 95,800. Wall Street rationalizes in the Bloomberg money world, folks, you're looking at yield up price down right. The rate of change is what you're saying you're correct on.

Correct. When we look at the volatility in the bond market and you can see it certainly this week. Yes. Does it feel like the U.S. bond market is increasingly looking like a developed developing market as opposed to a developed market? A little bit, yes. If I wanted this kind of volatility, I'd go and invest in another country's funds, not the US. Well, the irony today is that a number of emerging market financial markets have done better than the U.S. market in stocks and bonds this year.

And some of that is fundamentals. And some of it is just point in time and what those economies are doing. If I'm Korea or Taiwan and I'm doing a lot of I, that's obviously help me if I'm another country and I'm doing a lot of commodity exports, maybe that would have helped me. But I hear you. The point is that with our debt to GDP in the United States running around 100% and poised to go towards 120 over the next decade, and questions around who's buying the bonds and what yield they need to buy them, it makes things a little more tenuous.

You say we need to watch the US dollar because it'll suffer. If the US Treasury underscored that it can bring down yields. If you're an American living abroad, you certainly feel the effects of the dollar's strength and weakness is all the swings. Yep. And I feel affected if I'm traveling abroad. But it's not if I'm sitting here in New York for weeks on end. Right? No. Why am I missing 100%? If you're in America and you live in dollars, you get paid in dollars, you spend dollars.

The only way you're going to feel that exchange rate movement is what it does to inflation and what it does to financial conditions. And what I mean by that is when you have a weaker dollar, basically it tends to push up inflation in the US and at the margin, that might make it more likely that the Federal Reserve thinks it needs to raise rates. Uh, I'm more in kind of the the range camp right now. Um, so I don't think the dollar's about to fall off a cliff.

We just brought up the camp bill for this summer. Let's bring it up again. I was a mistake because it's Bloomberg money correction. And, folks, this is the U.S. debt clock pumping out of $40 trillion. You and I were weaned on Paul Angus, Sam Nunn, Pete Peterson in the race every year. Cry wolf, cry wolf, cry wolf in my retirement, in my wealth management study. Is it time to stop crying wolf? I think there's two things that are different today.

One is simply the size of the debt. Um, and the fact that that's one thing. The second thing is that neither the public nor the politicians are willing to turn the corner on fiscal policy. Americans since 2008 have been conditioned to think the government is going to come to their rescue anytime there's a problem. And politicians trying to hold on to their seats. Fiscal austerity doesn't get you reelected. And so it's just been this self-fulfilling thing where every government, both parties keep increasing that deficit, which pushes up that debt clock.

Um, so something has to give. We need politicians to be honest with voters and say we need to have fiscal austerity, and we need voters to accept that to have a stronger financial market and economy. There is a price. So when you say something has to give. What does that look like and how will people feel it? Well, if it is fiscal austerity, more spending cuts which are harder to do or tax hikes and we'll see who pays those tax hikes.

That's a question mark. Um, if it's not that and politically that's not likely any time soon. Then we have to get something else happening. And my fear and I'm not calling for a crisis, But my fear is this happens in an ugly way that forces the austerity, and that could come from a few things. It could come here at home. Let's say there's a catalyst that pulls down sentiment towards artificial intelligence, ie stocks.

It's not just my stock trade anymore, it's AI stocks, AI debt. Everything comes out of stock market. The entire corporate bond market globally now. Right I is in a lot of different markets. So that's one risk. I think a second risk is if inflation sticky, the fed has to raise rates higher than expected. That could be another catalyst. And don't forget overseas you might be spending and living in dollars. But if France has a debt crisis we will have contagion here in the US.

I'm sorry I didn't research just the interns of all going back to school. Are you went to task force? Are you on one of the task force? No. One of Warsh is five task forces. Lucky you. You're not on. What would you do on a retirement task force right now? What would be your retirement task force? Social security tax force for social security task force. We have to raise the age where you start getting benefits from Social Security.

People live 100% agree. We also the rich people have to put in more. We and we could do some means testing. I, I don't mind contributing a social security. I shouldn't get any. I'll live fine without it. I would rather have my money going to help people who need it more, and therefore we don't have a financial crime. I'm not sure that's a popular opinion. None of these are popular opinions, which is why it hasn't been addressed since he's not doing popular opinions.

Does she come back or not? Yes. We need to have her back. I would like to come back. Please have me back. All right. Rebecca Patterson from the Council on Foreign Relations. She will be sticking with us, but we're going to talk some more personal finance of Rebecca Schick on how she manages her personal finance. This is Bloomberg money. Blo