That yields have broken their secular downtrend doesn’t preclude cyclical reversion. What makes reversion likely? 1) It happened during the inflationary 1970s. 2) Battleships don’t turn on a dime. Any deflationary whiff is likely to spark memories of ZIRP-style repression.
Reposted from
Mark Ungewitter
1/ Reasonable odds that last week’s bond reversal has legs, given 1970s behavioral analog and potential attractiveness of 5% yield in 28x P/E environment. 🧵
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