David Kelly Says 'Real Rates Are Too Low'

The video discusses the recent rise in yields, comparing current rates to historical trends. It predicts future interest rate changes, suggesting a potential equilibrium level for the 10-year Treasury. The discussion includes the global fixed income market, highlighting the reduction in negative yielding assets. The focus then shifts to equities, emphasizing cyclical plays over defensive ones, with a positive outlook on financials and technology sectors. The impact of rising yields on dividend-focused stocks is also considered.

What is the historical average yield on a 10-year Treasury over the last 50 years before the financial crisis?

• 1.1%

• 2.0%

• 2.6%

• 3.5%

Which investment strategy is emphasized in the context of rising interest rates?

• Domestic versus International

• Value versus Growth

• Cyclical versus Defensives

• Short-term versus Long-term

Which sector is expected to benefit from a further increase in rates?

• Real Estate

• Financials

• Telecom

• Utilities

What is the potential impact on stocks like REITs and utilities if treasury yields rise?

• They will remain unaffected

• They will outperform technology stocks

• They will face increased risk

• They will become more attractive

Why might people be buying telecom stocks and utilities despite their expense?

• For their dividend yield

• For their growth potential

• For their low risk

• For their technological innovation