Hornbach: Global Economy Drives Bond Rally Into 2017

The video discusses the current state and future expectations of bond yields, focusing on the US Treasury market. It highlights a significant rally in bond yields, driven by global economic conditions, particularly in the G10 countries. The discussion includes the impact of slowing global growth on US and global markets, with a focus on Japanese investments in US treasuries due to low domestic yields. The video concludes with speculation on future bond yields and Federal Reserve policies, emphasizing the influence of global economic trends.

What is the expected trend for the 10-year Treasury yield by the end of the year?

• It is expected to rise by 25 basis points.

• It is expected to fall by another 25 basis points.

• It will remain unchanged.

• It will fall by 75 basis points.

How is the global economic slowdown expected to affect central bank policies?

• Central banks will reduce their accommodative policies.

• Central banks will increase interest rates.

• Central banks will likely tighten their policies.

• Central banks will maintain accommodative policies.

Why are Japanese investors interested in U.S. Treasury yields?

• Because Japanese yields are 100 basis points higher than in 2012.

• Because Japanese investors are avoiding U.S. markets.

• Because U.S. yields are lower than Japanese yields.

• Because U.S. yields offer higher returns compared to Japan.

What is the expected stance of the Federal Reserve on interest rates for the next 18 months?

• The Federal Reserve is expected to take interest rates negative.

• The Federal Reserve is expected to keep interest rates on hold.

• The Federal Reserve is expected to raise interest rates.

• The Federal Reserve is expected to lower interest rates.

What is the potential impact of the Federal Reserve's policies on the bond market?

• The bond market will likely ignore the Federal Reserve's actions.

• The bond market could price in additional action.

• The bond market will only react to negative interest rates.

• The bond market will remain unaffected by the Federal Reserve.