US | Positioning for rate normalisation
We see the strong pull back in long-term US yields since the peak of the reflation trade this year as an opportunity to enter new positions that capitalise on future macro trends driven by mid-cycle dynamics.
The recent price action means we are now ready to tactically enter trades which will benefit from sustained global growth as we go into 2022.
We telegraphed that the recent June Fed hawkish tilt would lead to a prospectively lower inflation risk premium, but we now believe this has largely played out in fixed income markets
We think the market has downwardly re-priced the Fed funds terminal rate too aggressively, and we see an uptick in the terminal rate from here.
Tags:
Related Services

Post
Tariff Sector Vulnerability Index
Electronics, electricals, motor vehicles, pharmaceuticals and machinery are most exposed globally to US-imposed tariffs.
Find Out More
Post
Silver lining for China’s residential real estate sector
Residential real estate commencements (floor area) are expected to pick up over 2025. However, activity will remain at structurally lower levels, with Chinese authorities expected to maintain their goal to clamp down on speculative demand.
Find Out More