United States Yields

The US faces the same economic challenges as the rest of the developed world: deficient demand that may endure for a generation. The question is whether its modest demographic advantage will prevent an infection of negative interest rates reaching its shores.

  • Yield curve valuation suggests short 30-year and long 10-year on a relative basis.

  • The negative yields on inflation bonds reflect their embedded protection against deflation and offer little benefit against inflation at current prices.

  • Corporate spreads are narrow and are lower than any period since the Great Recession of 2008, which suggests corporate bonds offer poor value.

  • Corporate yields offer a compelling relative value trade with a long 7-year and short 5-year position.


Disclaimer: All positions are suggestive of relative value and not intended as a recommendation or investment advice. Consult an investment advisor before implementing any investment strategy.

Los Angeles  |  San Francisco  |  213-459-3332  |   415-373-7152


©2003-2021 Capital Risk Management LLC. All rights reserved.


Capital Risk Management is a Registered Investment Advisor in California and may transact business there and in other states where it is notice filed or exempt.

Please note that although Capital Risk Management LLC is a Registered Investment Adviser, readers should be aware that registration with any state securities authority

does not imply a certain level of skill or training. Additional information about Capital Risk is available on the SEC’s website at www.adviserinfo.sec.gov or

through the Broker Check at FINRA.

Strategy | Investing | Asset Allocation | Liability Driven Investing | Pensions | Endowments | Enterprise Risk Management | Financial Planning | Wealth Management

Disclosures     Terms of Use     Privacy Statement      Form ADV