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Fixed Income Outlook - VP June 2024 Big Picture Discussion

This post is an excerpt from our June 11, 2024 market discussion video to VP clients. The full length, original video can be viewed here.

  • We review our US Fixed Income Dashboard ahead of the June Fed Meeting and inflation data.

  • Structurally: Fiscal deficits, demographics, geopolitical tensions, and pension funding ratios all bias yields higher.

  • Cyclically: Our US term-premium, fair value, and neutral-rate models indicate fixed income markets are fairly priced on a 6-12m forward basis. 

  • Tactically: Our Fed Hiking Regime model has triggered, but Powell has made clear his reluctance to hike, with the risk-reward appearing limited when looking at STIR markets.

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We build predictive investment models by combining timeless axioms with innovative techniques. Operating at the intersection of market history and data science, we believe that man + machine beats man or machine alone.