TD's Misra Warns of a Yield Curve Bear Steepening

The video tutorial discusses the differences between bear and bull steepening, emphasizing their impact on the economy. Bear steepening involves higher rates led by the long end, while bull steepening involves lower rates led by the front end. The discussion highlights how longer-term rates affect the mortgage market and consumer behavior. The speaker predicts that the US 10-year rate could reach 3% due to quantitative tightening and global rate rises, which may tighten financial conditions and impact the Fed's ability to hike rates above neutral. The video concludes by examining the potential for economic slowdown if bear steepening occurs.

What is the difference between bull steepening and bear steepening?

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Why does the speaker believe that longer-term real rates matter for the economy?

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What impact does the speaker suggest rising long-term rates have on the mortgage market?

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How does the speaker relate quantitative tightening to financial conditions?

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What does the speaker predict about the Fed's ability to hike rates above neutral?

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