We doubt Treasuries would underperform US equities as emphatically as they have in recent weeks if oil prices and inflation surged a lot more. Indeed, they could conceivably outperform – as they did at times in the 1970s – if that fostered expectations of an even more substantial tightening of Fed policy than the one currently discounted in the markets and raised concerns about the outlook for economic growth.
Subscriber content
Read this in full, free
Start a free trial and use one of your 10 free starter credits to unlock this piece.