Morgan Stanley's global head of interest-rate strategy says the the knee-jerk move in Treasury yields won't last long
- Whether it's Fed Governor Jerome Powell, the favorite in betting markets, or someone else such as John Taylor, Kevin Warsh or Janet Yellen, the knee-jerk move in Treasury yields won't last long, according to Matthew Hornbach, Morgan Stanley's global head of interest-rate strategy. He recommends fading the initial reaction to each of them within the first month. If Powell gets the nod, do it in the first week.
- "It takes more than just a change in the Fed chairmanship to get interest rates to trend in one direction," Hornbach said in a interview. "What I'm trying to get across in fading every knee-jerk move in the first month is simply that there's a limit to what the Fed chair can engineer over the course of his or her tenure.""If the market overreacts in that first month -- which markets tend to do from time to time -- you're supposed to take the other side," he said.
the Bloomberg piece is here for more
