will the 30 year treasury bond ever regain its bellwether status ?

Question

i miss the long bond ! yes they brought it back3 yrs ago but it ain't the same..that lower risk 10 year remains the bellwether. i miss trading bond futures...they're not as liquid and haven't been for a decade. trading ten year futures is boring...5 yrs more so... need to bring back the days when bonds moved 3-4-5 points like in the 80's and early 90's..with a steep curve, and even at sub-5%, our idiots at treasury still think that financing america through lower 2 yr treasury rates is cheaper than through long bonds. treasury is committing a mistake similiar to those who in the last 4 years financed their mortgages with low teaser rate arms and now face higher long term fixed rates as opposed to having bot homes at long 30 yr fixed costs of 5%. but of course, uncle sam bailed them out last week and froze their rates ( in a free makt economy ???) through the HOPE NOW ALLIANCE ( you gotta be kidding me...HOPE!)

Answer 1

You have to have high inflation in order to get the volatility in bond pricing. Bond prices are elastic in inflation volatility.

I wouldn't want the long bond. Look at the inflation outlook.

Answer 2

Nope, because the FED constantly "plays" around with interest rates. Some people won't even hold it for that long, and the yield may not ever go back to what it was in the 80's.

Answer 3

yea right !!!!!!!!!!!!!!!!!