By Tyler Durden
It has been a day of capitulation for Goldman. Just hours after the bank that controls the White House cut its forecast for Trump tax hikes by nearly 50% from $1.7 trillion to $1.0 trillion, moments ago Goldman, which starts off every single year predicting that 10Y yields will rise to 3.00% (or higher) over the next 12 months – much to our recurring mocking every single year – just cut its 10Y Treasury yield forecast for the end of the year. To be fair (to those who lost money listening to its reco) it did so kicking and screaming, with chief GS Intl strategist Francesco Garzarelli adding saying that “in relation to expectations around nominal activity growth and credit expansion, 10-year bonds now screen as expensive across the board.”
Well, maybe relative to Goldman’s expectations for nominal activity. Others, which as of today also include Fed’s Bullard, however are watching the chart below and have realized that any hopes for an economic rebound in the remaining 7 months of the year are now long gone.
The highlights from Goldman’s capitulation:
Bond bears have had a difficult start to 2017 as a combination of weakening inflation trends and increasing political …read more