Goldman Sachs's Big Bond Call Is Just Bluster. Again.
The bank is probably right that the yield curve will steepen in 2021, but the move will look paltry in a historical context and won’t do much harm to total returns.
Another year, another “baby bear market” bond call.
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Goldman Sachs Group Inc. is at it again in the world’s biggest bond market.
That was my immediate thought when I saw the Bloomberg News headline, “Goldman Goes All-In for Steeper U.S. Yield Curves as 2021 Theme.” The firm’s year-ahead investment outlook recommends that traders position for longer-term Treasury yields to rise on expectations for real growth and inflation, while the Federal Reserve pins down front-end rates near-zero. That’s sensible — and borderline consensus at this point — but just how far do the strategists expect this trade to go?