What Do the Midterm Results Mean for Rates?
It ties an election outcome to the two variables that drive bond portfolios: Treasury supply from deficits and the near-term path of Fed policy. Useful for advisors framing rate and duration conversations with clients.
Summary
By the markets & outlook deskOn the Basis Points podcast, Kevin Flanagan and Maggie Lucier discuss whether the midterm election results change the US fiscal outlook, arguing that political gridlock may not translate into less federal spending or lower Treasury yields. Flanagan also explains why another Fed rate hike remains possible in December and restates his 4.50%–5.25% trading range for the 10-year Treasury yield.
- Political gridlock may not mean less federal spending or lower Treasury yields
- Deficits and potential spending deals keep Treasury supply in focus
- Another Fed rate hike remains possible in December
- Flanagan maintains a 4.50%–5.25% trading range for the 10-year Treasury yield
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