Real Vision interview about my bullish view on Treasuries
I recorded an interview with Real Vision last week and discussed my bullish view on Treasuries (and by extension, my bearish view on USD). I also discussed the mechanism that Trump can use to fund a Strategic Bitcoin Reserve using the Exchange Stabilization Fund. Check out the interview here.
The bullish view on Treasuries is especially pertinent today as Treasuries and SOFRs breached their highest levels of the month yesterday. Part of the reason is due to the tech selloff triggered by DeepSeek, but it also highlights the fact that Treasuries will find any reason to rally, while strong data and tariff headlines can’t push them lower.
Until yesterday, barely any more cuts were priced in for this year, and the market has been concerned mostly about growth and inflation being too hot. However, two of my favorite sources of research, JDI Research and Alf from the Macro Compass, have both highlighted the risk of weaker US data in coming months. It’s a good time to be betting on a growth scare. The chart below shows the rolling 8th SOFR future, which represents the market’s pricing of interest rates 8 quarters from the present.
Over the past three years it has bounced between 2.75% on the low end to 4.5% on the high end, with 3.5% being the central axis. When it moves to the high end of the range, rates and the USD become restrictive and slow down the economy. When it moves to the low end, rates and USD become supportive for the economy and markets. The market has given us eight chances to profit from trading this range, and I believe this is the ninth chance to position for lower rates by selling the high end of the range.
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