Quadratic Capital Founder & CIO Nancy Davis on Fed, Tapering

The video discusses the Federal Reserve's shift in monetary policy, focusing on rate hikes and their impact on global markets. It explains the concept of break evens and the stress in bond markets, particularly in short-duration government bonds. The analysis of the US 10-year yield highlights market anomalies and the Fed's tapering strategy. The video also explores the Ivol ETF, emphasizing its role in managing interest rate curve expectations and asset correlations.

What was the Federal Reserve's initial stance on rate hikes before the June FOMC meeting?

• They were reducing rates.

• They had already implemented several hikes.

• They were not considering rate hikes.

• They were planning multiple hikes.

What is the primary difference between Treasurys with inflation protection and nominal Treasurys?

• Interest rate

• Issuer

• Maturity period

• Inflation protection

How did the US 10-year Treasury yield behave despite high CPI prints?

• It fluctuated wildly.

• It decreased unexpectedly.

• It remained stable.

• It increased significantly.

What is the expected effect of the Federal Reserve's tapering on the yield curve?

• Flatten the yield curve

• Steepen the yield curve

• Invert the yield curve

• No effect on the yield curve

What is the primary focus of the Ivol ETF?

• Real estate

• Corporate bonds

• Treasurys and options on interest rate curves

• Equity investments

What is the main goal of having a healthy upward sloping yield curve?

• To increase inflation

• To encourage lending and economic growth

• To decrease interest rates

• To stabilize currency exchange rates

In what conditions does the Ivol ETF aim to thrive?

• Stable interest rates

• Widening spread between short and long-dated rates

• Decreasing inflation

• Rising stock market