Comment
Since warning back in March that we were likely to see a “time and price” consolidation in US Treasuries, we have been shifting uncomfortably in our seats as the inflation and growth picture has continued to ratchet higher. Admittedly, this is a question of degree rather than direction. Consensus forecasts and survey positioning data all show that investors are already short or underweight fixed income and duration in favour of equities. Our problem is that we are very much at the high end of expectations for both inflation and growth as we have been repeatedly describing in our missives.
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