In this episode of the Odd Lots podcast, the discussion centers around the notable increase in 10-year Treasury yields since September 2024. The hosts kick off by examining the "term premium" and its role in this rise. They then delve into the effects of the unexpected 50 basis point rate cut by the Fed in September, coupled with the subsequent adjustment of the terminal rate. The conversation also explores how fiscal expectations following Trump's election and the implications of upcoming jobs data play into this narrative. As the discussion progresses, it expands to include global influences, such as the UK's economic landscape and the ongoing effects of quantitative tightening by several central banks. A key takeaway is that the rise in bond yields is driven by a complex interplay of factors, including Fed policy, fiscal expectations, and broader global economic conditions, making it challenging to pinpoint a single cause.
