...Jeffrey has had an ultra-successful investment career and has been spot-on with market timing, especially in 2017. He has called the direction of Treasuries and the US dollar, to almost the exact tick.
However, by far his biggest call, possibly in his entire career, is that the secular bond bull market is over, and that the US 10-year Treasury yield will hit 6% by 2020.
...This relationship between economic growth and interest rates is why, over time, bond yields track nominal GDP growth.
...inflation has remained largely absent....
...The indicator I use to get a broader, real-time measure of inflation is the New York Fed’s Underlying Inflation Gauge (UIG)....In December, the UIG hit its highest level since August 2006.
...One thing that has helped rates stay low is the lack of [bond] supply. For the last three years, there was negative net supply of bonds from the G3 central banks, and that’s about to change with quantitative tightening. There is a lot of bond supply coming.
The third reason Jeffrey believes the secular bond bull market is over is the coming tsunami of supply about to hit the bond market.
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