UBS's Donovan Doesn’t See Return to 'Fair Value' for Treasuries

The video discusses the concept of fair value in the treasury market, highlighting the disconnect between traditional economic models and current market realities. It explores factors like market manipulation, regulation, and demographics that distort market values. The speaker questions the return to a 'normal' market and examines historical perspectives on market values. The discussion also covers the yield curve inversion and its limited economic implications, emphasizing that fear of inversion can influence market behavior.

What is the perceived fair value for treasuries according to traditional economic models?

• 3%

• 4.5%

• 5%

• 6%

Which of the following is NOT mentioned as a factor distorting the market?

• Central bank reserves

• Technological advancements

• Changing demographics

• Regulations forcing fixed income purchases

What is the likelihood of returning to a fair economic value for treasuries in the near future?

• Very likely

• Somewhat likely

• Unlikely

• Certain

What is the main concern about yield curve inversions?

• They might change investor behavior

• They are a sign of market stability

• They always predict economic growth

• They are irrelevant to market dynamics

How does the Fed view yield curve inversions?

• As a critical economic indicator

• As irrelevant to their policy decisions

• As a minor concern

• As a sign of immediate recession