Part 6/8:
Turning to the bond market, Rosenberg offers a contrarian viewpoint, asserting his bullish stance on treasuries amidst rising yields. He attributes the yield increases to shifting expectations regarding Federal Reserve policy, noting a recent trend where market expectations oscillate dramatically based on federal guidance, causing premature market pricing for multiple rate cuts.
Despite current yields, Rosenberg anticipates potential downward movement, contingent upon a softening economy and declining inflationary pressures. He argues that a lack of fiscal stimulus will lead to tightening financial conditions, which historically pressures both equity and bond prices before expediting corrections once the recession emerges.