Take us through what's the key takeaway from the bond market. I mean that seems to be expectation that the Fed will be forced to
raise rates faster than anticipated. Well that's really all right to say that I see the market focus
very much on the efficient prints and he have been coming a little bit higher than what we been expecting. So that cast some
doubt on you know the central plus us and central bankers rhetoric that efficiency may be transitory.
I think the key issue really is a in the case of the U.S. fiscal policy is the spending with all these fiscal packages coming
from the private administration. Monetary policy well they have managed to avoid people control
whether they can avoid interest rate tension going on. Here is another issue altogether. But the Fed they basically said that
they want to have average inflation targeting framework. So they're going to let inflation one of the usual enjoy. But the
market doesn't believe that this is going to happen. I think once we see inflationary expectations be and trend and be better
I think the Fed will have a much much tougher job of trying to convince markets that you either. So you're right to say that
bond markets will have a very very challenging time. And I don't think there's going to be an immediate resolution on this. So
although we saw recently there was some pushback from poll and also from the Finance England on all these very impressive
interest rate expectations. But it's still going to be very much market versus the central banks going to hit.
What's your inflation hedge then Selina. Well a lot of people are looking at inflation hedges like
precious metals gold for instance and even alternative assets. So crypto has been getting a little bit of wind and seals
recently. I think the issue here at the end of the deal is that interest rates have to rise is a question of the timing. And so
far the Fed wants to delete need for as long as possible in order to ensure both growth and inflation levels return to
sustainable levels into 2020. To itself a market may not get them that long a window. We do think that probably the
inclination is that they will have to start to hike rates by the second half of next year. But whether they will hike ones or no
up to two or three times that's what the futures market has really sort of priced in is still a matter of debate. If anyone
really very much continue to depend on the labor market going to hit. We have seen the unemployment rate has dropped to four
point six percent but total jobs we mean about four point two million below people that levels. So once it gets started to
close it's very likely that you're going to see pressure return again to the bond market pressure effective at a hit rather than
behind the curve. I mean the question is what is it pricing in right now. If you
look at the yield curve and if you look at the tips curve as well with the negativity that would suggest that a lot of people
are taking out a lot of protection against inflation. So is there a disconnect between the Fed and the market.
Definitely. I think this disconnect is really growing. You know given the negative real use I think at some point of what we
continue a slight pressure for the nominal use to rise. So a 10 year treasury. You raised it by looking at it still around one
point five hundred one point seventy five percent. So that's a little bit more room to go. And I think as we get into the whole
issue about you know where's the financing for the trillion dollar infrastructure package going to come from probably you're
going to see the like project and to the end of this year and the 2020 to a assault.
So Lina that takes us to our question of the day how low can you as real Treasury yields go. It's already in the negative.
I do see that probably does going to be limited downside from here. At some point A recalibration B has to happen more on D
nominal use site. That's why I think that we will probably see a push higher and nominal you back to what's the one point seventy
one point seventy five percent reach for the 10 year treasury. I think at this juncture Mark is still trying to test the
resolve of the central banks to pull off a rate hike. As far as effects from sun I think at some point you going to do something
to see a bit of a split in terms. The central by itself. And it will be quite interesting to see who President Biden actually
nominates for the new Fed chair because I think that we're kind of set the tone for the monetary policy funds we may get from no
real February or March onwards next year. So it is going to be Brannon. I think you sensing that she's still going to be this
guy in line with Hubble but we'll just have to wait and see.