Hegarty: Violent Upside Move Probable if Low Vol Persists

The video discusses the impact of global quantitative easing (QE) by the ECB and the Bank of Japan on US yield curves, leading to a compression of term premiums and affecting inflation expectations. It highlights the role of central banks, particularly the Fed, in market repricing and the influence of inflation data on these processes. The discussion also covers investment strategies in a low-yield environment and the potential for market volatility.

What impact does global quantitative easing (QE) from the ECB and the Bank of Japan have on nominal yield curves?

How does the compression of term premium affect inflation expectations?

What factors contribute to the lack of demand for longer dated inflation-linked securities?

Discuss the potential consequences of a violent move to the upside in yields.

What role do central banks play in repricing inflation expectations?