George Goncalves: Why the Fed Wants to Avoid Yield Curve Control

Published on
August 27th, 2020
Duration
32 minutes

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19

George Goncalves: Why the Fed Wants to Avoid Yield Curve Control

The Expert View ·
Featuring George Goncalves

Published on: August 27th, 2020 • Duration: 32 minutes

Many have written off the bond market as the arbiter of truth with claims that the Fed’s intervention into the market has removed price discovery. In this interview, bond strategist George Goncalves argues otherwise and makes the case that there is still plenty of valuable information left in the long end of the curve. He also points out that the Fed has stepped back from the market recently, touches on the Fed’s ever-dwindling quiver of arrows as it relates to yield curve control, and explains why he believes they will do anything they can to avoid it. Additionally, he gives his short and long-term view on where yields are headed, arguing that although he doesn’t believe the low is in for yields, we may see 1.00% or higher on the 10-year before we get there. Filmed on August 25, 2020.

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Transcript

Chapters

  1. 00:00:51
    Current Macro Overview
  2. 00:03:30
    What Tools Does the Fed Have Left?
  3. 00:05:52
    Making Sense of Fed Commentary and Actions
  4. 00:14:54
    Real Rates and the Fed’s Role in the TIPS Market
  5. 00:16:49
    Problems with Yield Curve Control
  6. 00:20:14
    Can the Fed Avoid Japanification?
  7. 00:22:17
    Short-Term Outlook for Prices
  8. 00:25:36
    How Could Pre-Election Stimulus Affect the Bond Market?
  9. 00:26:43
    When Will the Levered Players Return?
  10. 00:27:57
    Will the US See Negative Rates?
  11. 00:28:29
    Long-Term Outlook

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