
Even though the Federal Reserve is widely expected to effectively cap U.S. government borrowing rates up to 10 years over years ahead, speculators continue to open up short positions on futures of longer duration and last week's CFTC data showed the net short on the 30-year long bond future at its highest ever. Perhaps reflecting a mood ahead of this week's 30-year auction, it may also reflect an assumption the Fed will allow the yield curve to steepen beyond 10 years amid a post-pandemic recovery that will see more fiscal spending after this year's election and a rise in long-term inflation expectations.
Chart by Ritvik Carvalho and commentary by Mike Dolan
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