(Bloomberg) — Financial giants from Goldman Sachs & Co. to Morgan Stanley and Barclays Plc. are taking a fresh look at how a Donald Trump victory in November could play out in the bond market.
After last week’s debate hurt President Joe Biden’s chances of winning reelection, Wall Street strategists are urging clients to position for sticky inflation and higher long-term bond yields.
Trump’s rise in the polls since Last week’s debate means investors have to contemplate economic policies that could lead to more rate cuts from the Federal Reserve, along with a Republican sweep that leads to fiscal expansion and pressures longer-term bond yields higher, Morgan Stanley said.
McIntyre said he “is worried that the bond vigilantes are coming out early in response to the debate falling out.” The odds of a Republican sweep in November will increase from a combination of “Biden’s performance, weaker data, higher oil prices.
The uptick in Treasury yields was led by the longest maturities, with 30-year bond yields up as much as nine basis points to a session high of 4.65%, the highest level since May 31
Not all on Wall Street are convinced that higher long-term Treasury yields and steeper curves are inevitable.
Published on 08/07/2024
By Michael S.
