Bill Gross Sees 'Relatively Mild' Bear Bond Cycle

The video discusses the Federal Reserve's position on real interest rates, comparing historical and current rates. It explores the Fed's target for the Fed funds rate in relation to inflation and market expectations. The discussion shifts to the dynamics of the yield curve, analyzing whether current trends indicate a fundamental shift or a temporary market reaction. The impact of inflation on longer-dated treasuries and the yield curve is also examined, suggesting a mild bear cycle with a positive curve.

What is the Federal Reserve's potential target for the real rate of Fed funds?

• 2%

• 3%

• 0%

• 1%

What recent change has been observed in the treasury market's yield curve?

• It has remained unchanged.

• It has become steeper.

• It has become flatter.

• It has inverted.

What is one reason the speaker does not support a flatter yield curve?

• Higher inflation expectations

• Lower inflation expectations

• Increased government spending

• Decreased government spending

According to the speaker, what is the expected spread for the 2:10 yield curve?

• 45 to 50 basis points

• 20 to 25 basis points

• 10 to 15 basis points

• 60 to 65 basis points

What type of cycle does the speaker predict for the yield curve?

• A mild bull cycle

• A strong bear cycle

• A mild bear cycle

• A strong bull cycle