Concern the Fed will increase its target rate for overnight loans between banks next year is showing up in wider price swings for shorter-term securities. Volatility in five-year Treasuries rose above 10-year (USGG10YR) notes for the first time since 2011 and yields on two-year notes more than doubled in the past four months. Bill Gross, who manages the world’s biggest bond fund at Pacific Investment Management Co., reiterated today his recommendation to buy debt with short maturities. Bloomberg
What other interpretation? Sell the long bond, buy the short note. Build up liquidity.
But I can't see a big crash coming, we can stumble and still do a 1.6 annual GDP, right now we are at an uncertain 2.5. I mean, the crash will be hardly noticeable, to the consumer.
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