What a Hawkish Fed Pivot Could Mean for Treasuries

The transcript discusses the potential for rate hikes and the market's confidence in the Fed's actions. It explores the possibility of a faster taper and the Fed's response to inflation and employment data. The analysis includes real yields and the Fed's potential pivot towards a more hawkish stance, which could impact risky assets. Global risks, such as COVID and economic conditions in Europe, are considered in relation to the strong US economy. The discussion concludes with insights into the yield curve and investment strategies in light of potential Fed leadership changes.

What is the market's expectation for the Federal Reserve's rate hikes by the end of next year?

• No hikes expected

• Three hikes by the end of the year

• Two hikes in March and September

• One hike in June and another in November

What is the potential impact of a hawkish pivot by the Fed on real rates?

• Real rates will decrease significantly

• Real rates will remain unchanged

• Real rates will start to rise

• Real rates will become negative

How does the Fed's focus on US economic data affect its response to global risks?

• The Fed ignores global risks completely

• The Fed prioritizes global risks over US data

• The Fed focuses on US data while acknowledging global risks

• The Fed only responds to global risks

What is the recommended trading strategy for the yield curve in light of potential Fed policy shifts?

• Invest in equities

• Short duration

• Hold cash

• Long duration