Jan Hatzius of Goldman Sachs explains why he doesn’t see a disorderly unwind in the US Treasury bond market. Here are some of the key points he mentions:
- Goldman sees a 3% 10 year yield by 2015.
- The economy should continue to expand into 2014.
- The fiscal drag from the government will soften in the coming quarters.
- The Fed will taper beginning in December, 2013 with a possible announcement in September.
- Inflation is likely to remain low.
- The US could be running a primary surplus much sooner than most believe.
- Bond vigilantes aren’t coming.