Pension Fund Demand to Cap Treasury Yields: BNP's Ladha

The video discusses the current state of pension funds, highlighting their strong position since the 2008 financial crisis. It explores their role in supporting US fixed income markets and the impact of their demand on long-term interest rates. The discussion also covers the Federal Reserve's influence on market repricing and interest rates, as well as the effects of quantitative tightening and fiscal policies on market dynamics. The video provides insights into the challenges and opportunities in the fixed income market, emphasizing the importance of understanding these factors for financial decision-making.

What is the current financial status of the 100 largest corporate pension funds?

• They are at a surplus of 95%.

• They are fully funded.

• They are underfunded.

• They are at a deficit.

What is the expected annual pension demand for US fixed income?

• 40 billion

• 50 billion

• 20 billion

• 30 billion

What is a key question regarding long-term interest rates?

• Should we lock in 2.75% tenure yields for the long term?

• Will interest rates drop below 1%?

• Is it better to invest in short-term bonds?

• Are pension funds reducing their investments?

What is the equivalent of a balance sheet runoff in terms of a basis point move?

• 10 basis points

• 15 basis points

• 25 basis points

• 20 basis points

Who ultimately decides where the duration is supplied during QT?

• The Federal Reserve

• The Stock Market

• The Treasury

• The Pension Funds