Treasury yields fell on Tuesday, easing off 16-year highs that had spooked markets over the past week.
But Sofi head of investment strategy Liz Young told Yahoo Finance Live that the market’s latest “pain trade” might not be over.
“I don’t think bonds are completely out of the woods yet,” Young said. “We also haven’t seen very much weak economic data…At this point there hasn’t been a good reason for yields to come down and stay down.”
Young highlights that yields are moving down ahead of the latest read on inflation expected on Thursday. Last month’s Consumer Price Index report showed prices grew 3.7% in August compared to last year, an increase driven largely by rising energy prices. While economists surveyed by Bloomberg see inflation ticking down to 3.6% in September, Young is “not super optimistic” based on energy prices moving higher for much of the month.
Higher inflation could…
