What the Fed Cut Means for the Treasury Trade

Published on
September 19th, 2019
Duration
17 minutes


What the Fed Cut Means for the Treasury Trade

Trade Ideas ·
Featuring Tony Greer

Published on: September 19th, 2019 • Duration: 17 minutes

Tony Greer, editor in chief of The Morning Navigator, breaks down the FOMC’s decision to cut interest rates and discusses why he thinks it’s business as usual for markets. In this interview with Alex Rosenberg, Greer walks through the recent spikes in both oil prices and the repo market respectively, highlights the trade war’s impact on the bond market, and reviews where he expects the 10-year Treasury note to head next. Filmed on September 18, 2019.

Comments

Transcript

  • CL
    Charl L.
    28 October 2019 @ 20:09
    Excellent interview with an interesting perspective on the world. Thanks Tony.
  • JS
    John S.
    8 October 2019 @ 18:04
    I'm not wrong about em just early. The reflation trade will work because it's time. The Fed will do whatever it takes to steepen the curve. Just curious...does this guy ever look at economic data or is he permanently glued to valuations and/or ideas that "should" work because _____?
  • DH
    Daniel H.
    7 October 2019 @ 04:57
    It is only three weeks later, and this interview has not aged well. Last one was like that too.
  • RA
    Ralph A.
    22 September 2019 @ 21:03
    Did he really say that the transportation industry is strong? It is a disaster right now.
  • JC
    John C.
    22 September 2019 @ 15:55
    Good interview as always. I could see a short term spike in yields but honestly the last two weeks have been brutal and since Powell was at least a little hawkish I think the markets are not expecting more than 1 more cut at this point. Julian thinks they need at least another 50 bps, while Snider thinks the Fed are as clueless as ever and will end up having to cut more and do more QE than they ever would have thought. That could be sooner than we think, but given where equities are I'd think there could be continues strength for a couple more months as least. Just feels like the markets are not expecting 3Q to be that bad whereas comps are tough and they could really disappoint, combined with year end issues, a stronger USD and general pullback in liquidity could mean more volatility ahead -- i.e. in October.
  • JJ
    Johnny J.
    20 September 2019 @ 19:54
    I don’t think I could disagree more regarding rates and repo, but it’s good to hear another perspective
  • AP
    Adam P.
    20 September 2019 @ 13:15
    Tony Stark + Neagan
  • KS
    Kenneth S.
    20 September 2019 @ 02:42
    I agree about the Brexit bullshit. Good call.
  • PT
    Pradeep T.
    20 September 2019 @ 00:35
    Thanks Tony; this is very helpful.
  • wj
    wiktor j.
    19 September 2019 @ 20:39
    Remind me wasnt there another speaker here that laid out how much risk there is in a bond ETF? Why would anyone want to invest in it?
    • DW
      Dean W.
      22 September 2019 @ 20:13
      Hari Krishnan gave a excellent summary of the risks of bond etfs in a recent interview. That doesn’t mean they’re not tradable. The problems might not manifest until every one runs for the exit at the same time.
  • wo
    wellies o.
    19 September 2019 @ 19:57
    Brexit is complete bullshit! :) refreshing interview!
    • SS
      Shanthi S.
      22 September 2019 @ 21:24
      Wasn’t he implying that Brexit, being a UK phenomenon, shouldn’t be used by Powell as a reason to justify US monetary policy, not that Brexit itself is BS? That’s what I understood at least. Maybe my pro-Brexit bias is effecting my comprehension though. :)
  • MT
    Mike T.
    19 September 2019 @ 19:27
    Whilst I have no reason to doubt the professionalism or integrity of Mr Greer but with all RV content I rarely watch the actual videos, preferring instead to download the transcripts and start by searching for my favourite strings e.g. < moving average > < trade war > < China > < Trump > and when I found the reference to 10 year yields broke through their 50 day I immediately stopped right there and then. Apologies to Mr Greer but I did not read the rest of the text. I have no idea which way Yields are going in the future but I would maintain it's not necessary to know or burn cycles trying to formulate a view point e.g. yesterday in the run up to the FED announcement premiums in TLT and /ZB Options were elevated ( very expensive ) relative to historical 'norm' which presented a perfect opportunity to enter a non-directional, undefined risk short premium Option position in TLT Selling to Open and receiving a 'rich' $$ Credit and then earlier today, post the FED, premiums in TLT collapsed by over 21% relative to yesterday so immediately entered a 'Buy to Close' debit trade paying a much lower price to get out than I sold the initial position for less than 24 hours ago.
  • RM
    Ryan M.
    19 September 2019 @ 17:23
    I love Tony. He is a real macro trader and his trade ideas interviews are my favourite cos he is a terrific communicator and he gives you a look into how the pros distill information to create tradeable ideas in real time.
  • TR
    Travis R.
    19 September 2019 @ 14:59
    TG thinks it is unacceptable that a sitting President would criticize the Fed. What is really unacceptable is the Federal Reserve system itself. Why have we ceded control of the monetary system to a private bank owned by shady interests? Ron Paul is absolutely correct. Read The Creature From Jekyll Island by G Edward Griffin and draw your own conclusions.
    • TG
      Tony G. | Contributor
      19 September 2019 @ 15:00
      Criticism in the proper arena is fine. Crushing the guy in Twitter before he even gets to speak at a press conference is madness. I'm an End the Fed guy too.
  • VP
    Vincent P.
    19 September 2019 @ 14:59
    Like the timeliness of this interview which begs for a daily video of relative overnight news and market events with commentary from a guest or staff. 10-15mins is perfect! Keep up the great work! Thanks.
    • TG
      Tony G. | Contributor
      19 September 2019 @ 15:01
      Thanks Sam.
  • SS
    Sam S.
    19 September 2019 @ 14:42
    Tony admits his timing has cost him, but we all have to look in the mirror and admit it's happened to all of us. His connecting the dots is spot on, basically saying it's not a linear answer or response. Lot's of variables and how he perceives them. I agree with his liquidity big picture concerns and the hunt for US Dollars. Well done.
    • TG
      Tony G. | Contributor
      19 September 2019 @ 15:01
      Thanks Sam.
  • MS
    Malcolm S.
    19 September 2019 @ 14:18
    Earnings will not be strong this quarter. He needs to watch Hedge eye TV
    • TD
      Taylor D.
      20 September 2019 @ 04:21
      Someone needs to take the other side of the trade though.
  • CC
    Cornelius C.
    19 September 2019 @ 14:04
    dude looks way too much like tony stark
    • JQ
      JACK Q.
      19 September 2019 @ 14:35
      Hahaha
    • TG
      Tony G. | Contributor
      19 September 2019 @ 15:02
      If I got $5 every time someone said that I'd be retired....
  • RM
    Russell M.
    19 September 2019 @ 13:49
    I gave him a thumbs up for good overview of markets and their pluses and minus'. I don't necessarily agree with his conclusions about which side is correct. For example, my sense is 10yrs yields will go lower as a result of the Fed's rate cut and future rate cuts which are inevitable because the US and world economy is slowing and the Treasury will have to borrow more to make up for the tax cuts and slowing tax collections. If the Fed doesn't continue to drop rates to feed the governments borrowing needs, interest costs will swamp the federal budget. This is a big medium to long term problem.
    • TG
      Tony G. | Contributor
      19 September 2019 @ 15:03
      my big picture view is lower rates. fair points thanks Russell.
    • JA
      Jordan A.
      19 September 2019 @ 22:08
      Totally agree. The neutral rate of subway tokens is 0.
  • RM
    Richard M.
    19 September 2019 @ 12:58
    Good analysis Tony! (not sure why so many thumbs down on this as I didn't hear anything really objectionable - unless we have a bunch of English viewers who didn't like your Brexit comment ).
    • AJ
      Andrew J.
      19 September 2019 @ 13:02
      Was taken aback by comments about tech and transports being by so strong. Wondered if he simply misspoke...because it just ain’t so.