DoubleLine Capital Maintains Bearish Outlook on US Treasuries
DoubleLine Capital remains underweight or short on long-term US Treasuries, citing inevitable fiscal pressures despite temporary market flights to safety.
Sherman Hemsley, a representative of DoubleLine Capital, maintains a bearish position on long-term U.S. Treasuries. He reports that the firm remains significantly underweight or outright short on the back end of the yield curve, arguing that U.S. fiscal pressures will eventually materialize.
Hemsley acknowledges that a flight to safety can temporarily overwhelm these fiscal concerns from a trading perspective. However, he asserts that the Federal Reserve System needs to hike interest rates to align with market pricing for the next three to six months. He suggests the central bank may avoid these hikes to prevent catching the market off sides.
