JP Morgan's Berro on the Narrow Treasury Yield Curve

Kelsey Barrow from JP Morgan discusses market movements, Fed's inflation forecasts, and the potential timing of the first rate hike, expected in 2023. She highlights optimism about economic growth, driven by payrolls and fiscal policies like the American Recovery Plan. The discussion also covers the Fed's tapering strategy, focusing on Treasurys and MBS, amidst a booming housing market.

What is the significance of the five-year yield moving up by 10 basis points?

• It suggests an increase in unemployment rates.

• It indicates a decrease in market confidence.

• It reflects the market's view on monetary policy.

• It shows a decline in inflation expectations.

Why does Kelsey Barrow believe the first rate hike will occur in 2023?

• Because the tapering process and potential pauses extend the timeline.

• Due to the immediate impact of fiscal policies.

• Because the Fed has already started the tapering process.

• Due to the rapid resolution of supply chain issues.

What is Kelsey Barrow's outlook on economic growth as we move into the second half of the year?

• She is optimistic, especially about payroll growth.

• She expects growth to slow down significantly.

• She believes growth will remain stagnant.

• She is pessimistic due to fiscal constraints.

How does Kelsey Barrow suggest the Fed should approach tapering?

• By delaying any tapering actions.

• By increasing the purchase of MBS.

• By tapering Treasurys and MBS simultaneously.

• By focusing solely on Treasurys.

What is the current state of the housing market according to the discussion?

• It is declining due to high interest rates.

• It is on fire and recovering strongly.

• It is stagnant with no significant changes.

• It is experiencing a downturn.