Why JonesTrading's O'Rourke Thinks Shorting Bonds Is the Trade of the Year

The video discusses the impact of a large supply of US Treasury auctions on the market, focusing on the 10-year yield's significant rise since 2013. It explores the yield curve, particularly the 2:10 spread, and the potential for a steepening curve in 2018. The discussion includes the implications of government debt issuance and projections for the two-year yield reaching 3% with expected rate hikes. The video also covers trading strategies related to treasury futures, emphasizing a short position due to anticipated rising yields.

What significant event in 2013 is the current rise in the 10-year yield compared to?

• The financial crisis

• The taper tantrum

• The housing market crash

• The dot-com bubble

What is the expected impact of the Federal Reserve's rate hikes on the yield curve?

• No change in the yield curve

• Inversion of the yield curve

• Flattening of the yield curve

• Steepening of the yield curve

Why is the government expected to issue a large amount of new debt?

• To support social programs

• Due to trillion-dollar deficits

• To fund infrastructure projects

• To stabilize the stock market

What is the anticipated effect of three rate hikes on the two-year yield?

• It will decrease to 2%

• It will increase to about 3%

• It will remain unchanged

• It will decrease to 1%

What does a downward sloping commodity curve indicate about treasury futures?

• Treasury futures are expected to rise

• Treasury futures are expected to be volatile

• Treasury futures are expected to trade lower

• Treasury futures are expected to remain stable