Friday, March 17, 2017 11:02:37 AM
Another obvious potential short is the US bond market. Bonds rallied some this week in relief that the Fed didn't sound any more hawkish than they already were, but on the charts it looks like only a temporary reprieve.
Looking at the Vanguard Total Bond Market ETF chart (BND) as a proxy, it's sitting right near key support (80) and not looking very robust.
And here's the 20 year US Treasury ETF (TLT). After 35 years of falling interest rates (down to zero), the bond bubble may have to reverse -
But Rickards has been saying that the Fed may eventually be forced to back off on their aggressive tightening plans. And based on the replacements they select for the missing seats on the Fed Board of Governors, there might be a move toward a more dovish stance. But as things stand now, it sounds like the Fed has no plans to back off in the near term, which could put more pressure on the bond market.
So even if investors don't go short, it seems only prudent to lighten up on longer term bonds.
Looking at the Vanguard Total Bond Market ETF chart (BND) as a proxy, it's sitting right near key support (80) and not looking very robust.
And here's the 20 year US Treasury ETF (TLT). After 35 years of falling interest rates (down to zero), the bond bubble may have to reverse -
But Rickards has been saying that the Fed may eventually be forced to back off on their aggressive tightening plans. And based on the replacements they select for the missing seats on the Fed Board of Governors, there might be a move toward a more dovish stance. But as things stand now, it sounds like the Fed has no plans to back off in the near term, which could put more pressure on the bond market.
So even if investors don't go short, it seems only prudent to lighten up on longer term bonds.
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