What to Watch: U.S. Inflation Bets Are Tanking

The video discusses the recent repricing of Treasurys and the potential peak in the market. It explores the possibility of the Fed pausing its rate hiking cycle and the market's unpreparedness for such a move. The discussion also covers the impact of foreign investments and FX hedging costs. Additionally, it analyzes the performance of bonds and shifts in Treasury issuance, particularly under the Trump administration.

What is the potential impact on the Treasury market if the Federal Reserve pauses its rate hiking cycle?

• The front end of the curve may steepen.

• The front end of the curve may flatten.

• The long end of the curve may steepen.

• The long end of the curve may flatten.

How might the market react if the Federal Reserve pauses rate hikes sooner than expected?

• The market will increase investments in Japan.

• The market will focus more on European markets.

• The market will reassess its view of the US economy.

• The market will likely remain unchanged.

What has been a significant factor in the changing strategies of foreign investors?

• Decreased European market stability.

• Increased US economic growth.

• High FX hedging costs.

• Low interest rates in the US.

What was a major concern with the change in bond issuance strategy under Trump's administration?

• The decrease in bond performance.

• The increase in foreign investor participation.

• The reduction of short-term Treasury supply.

• The introduction of Ultra Long Treasurys.

What is the implication of the last rate hike being close to or above 3%?

• Tens will outperform fives.

• Fives will outperform tens.

• Twos may have upside potential.

• Twos may still have downside potential.