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Top Bond Fund Manager Warns: 'Prepare For More Market Turbulence'
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Federal Reserve Chairman Jerome Powell was very clear last week that he and his peers on the FOMC will continue to raise interest rates next year - even if the pace of rate hikes could be somewhat slower than previously anticipated. And while equity investors were quick to take him at his word - sending the S&P 500 8% lower and bringing the longest bull market in history to a sensational end - bond traders have been somewhat more reluctant.
Indeed, a selloff that began back in September with short-term yields breaking to heights unseen since the crisis ended with Treasury yields moving back below these key psychological levels, with the 30-year below 3% and the 10-year trading at 2.8%. Unsurprisingly, these moves have accompanied expectations that the Fed's own dot plot is far too optimistic and that, in the market's view, a rate hike next year is about as likely as a rate cut.
This probably offered some relief to Treasury Secretary Steven Mnuchin, who tried (and failed) to ....
