BCA Indicators/Model
Despite recent increases, long-maturity Treasury yields are roughly consistent with fundamental fair value. We see limited value in long duration plays.
MacroQuant recommends a slight underweight position in equities, and favors a below-benchmark duration stance in fixed-income portfolios. The model is very positive on the US dollar, neutral on gold, constructive on copper, and very bullish on oil.
Rising term premium is often read as a fiscal warning sign. We show the real driver is monetary policy uncertainty, and what the implications are for global term premia going forward.
Despite today’s hold, the bar for a rate hike in September remains low and contingent on the next two core CPI reports.
In this Strategy Insight, we assess how Middle East-related energy and shipping disruptions are shaping the global inflation outlook and review the implications for inflation-linked bond markets. We also examine the outlook for core inflation and the resulting implications for central bank policy and duration positioning.
