Short bonds is certainly the first one that comes to mind. If you want to make it cheaper and safer, a bear steepener (eg buy puts on long bond, sell puts on ten year, terminal duration neutral). TBH, I am amazed that the bond market is not going nuts over this.
Like I said, I like the Hong Kong flat rate. Average Americans should pay less with the tax plan due to the doubling of the standard deduction, which is used by 78% of taxpayers. Also the working poor will get help with an increased child care credit (not deduction, money in pocket). Personally I am not envious or jealous of billionaires so if they get a tax cut too, it is okay with me.
What's the reasoning here? No need to borrow as much now that corps get to keep more? Or expected growth hence smart money moving away from safe investment into higher yielding ones?
FWIW.....shop I follow held that view but now see a flattening of the curve, late cycle economics. 10 yr below 2% by yr end 2018. I'm not sure I agree.
Well, they must also think SPX < 1600 by that time Doing it as a conditional steepener is a nice way to express that view - if we 10s do rally back to under 2%, the trade just goes away
Well, that hasn't worked since 2008. But as I always like to say, if the ball comes up red 10 times in a row, then black is due! I just wish maybe 5% of what I learned in my economics curriculum in school actually worked in real life. LOL. Why do markets always have to be so "tricky"?
It's obviously conditional on the overall state of economy - if we are in a boring market, the bonds will eventually sell-off. In a flight to quality, all bets are off. That's why if I were doing this trade, I'd do it either by buying puts outright or doing a conditional steepener.