COTW: Will Shadow Easing Drive Treasury Yields Higher?

September 23, 2019

The idea for this chart came from work done by Nordea earlier this month and then was expanded on in a post this weekend. Over the past decade, periods of quantitative easing have generally coincided with rising Global Manufacturing PMIs and Treasury Yields, while periods of relative monetary tightening--as these programs have been suspended or (attempted to be) unwound--have seen growth and interest rates decline. With the Fed recently being forced to expand its balance sheet to offset unusually high Treasury issuance as the government's cash balance is rebuilt and the ECB to start buying bonds in November, bond markets may be underestimating the combined impact of this monetary policy accommodation on growth and Treasury yields.


There are myriad offsetting factors that could drive yields lower, but given market consensus appears tilted to the prospects of ever lower interest rates, we think investors should consider alternative scenarios. 


The chart below can be downloaded here.


SpringTide Partners, LLC is a Registered Investment Advisor with the state of Illinois and other states jurisdictions where required. Registration with the SEC or any state securities authority does not imply a certain level of skill or training. All information contained herein is for informational purposes only and does not constitute a solicitation or offer to sell securities or investment advisory services. All investing carries risk including risk of principal loss. All statements made on this website are opinions of SpringTide Partners, LLC and are subject to change. SpringTide Partners, LLC assumes no responsibility for the accuracy of the data included. Statements made on website shall not constitute investment advice.

Share on Twitter
Please reload

White PNG.png
SpringTide Partners
200 West Superior Street, Suite 200
Chicago, Illinois 60654
T  312 620 6362
  • White Twitter Icon
  • White LinkedIn Icon

Manager submissions? Submit info here

The information contained in SpringTide Partner's website is of a general nature and for informational purposes only and does not constitute financial, investment, tax or legal advice. These materials reflect the opinion of SpringTide Partners as of the date produced and are subject to change at any time without notice due to a variety of factors, including changing market conditions or tax laws.  Where data or analysis is presented that is prepared by third parties, such information will be cited. These sources have been deemed to be reliable by SpringTide but no guarantee can be made as to their accuracy.  Any links to third party websites are offered for use entirely at your own discretion. SpringTide Partners is separate and unaffiliated from any third parties listed herein and is not responsible for their products, services, policies or the content of their websites. All investments are subject to varying degrees of risk, and there can be no assurance that the future performance of any specific investment, investment strategy or product referenced directly or indirectly in this website will be profitable, perform equally to any corresponding indicated historical performance levels, or be suitable for your portfolio. Past performance is not an indicator of future results.

© 2019 SpringTide Partners. All Rights Reserved.