Artis Real Estate Investment Pref Shs Series E T.AX.PR.E

RE:COORDINATED FINANCIAL MARKETS NARRATIVE

[Torontojay]

garyreins wrote: I do believe there is to some degree a coordinated narrative and trade that happens, ,perhaps controlled by the big players like goldman sachs and the banksters.  

So if yields start falling due to bad economic data and recessions, the trade starts off slowly (like we're seeing now, bonds rallying, reits rallying, markets going down)

Then in a few months theres going to be something unforseen like another bank trouble or credit event, and that gives the fed an excuse to cut bigger and deeper and markets to sell off more (the 2nd half of the trade in accelerated fashion), that continues into 2025.  Then you just had a 1.5- 2 year rally in bonds

just speculation but not that unreasonable

 

That makes sense to me.

Fed funds is 200 bps above neutral but inflation is only 100 bps above target. That doesn't make any sense unless it gets back to neutral because real economic growth slows down too. 

If we were to avoid a recession, then Fed funds need only drop by 100 bps (3% inflation vs 2%) and the neutral rate would be 4.25% - 4.5%. The 10 year t-notes would steepen by yields pushing to the 5% +  range and that's how the yield curve would normalize. In a healthy economy, the long end should be higher than the front end. 

If I'm wrong and we don't get a recession then I'm very confident to say 10 year yields are going to reach 5%+ . I just don't think the economy is that strong.