Smartest guys in the room!? I don’t know about that.
Goldman Sachs lowered its year-end estimate on 10-year Treasury yields to 2.50% from 3.00% (spot at 2.19%). In German bunds, they lowered the estimate to 1.00% from 1.90% (spot at 0.85%).
They said the new forecast was based on a “mark-to-market exercise” which is a fancy way of saying “the market is so far from our forecast that it’s completely impossible at this point so we’re trying to quietly climb down.”
They say the “growth scare” recently has been amplified by positioning and has “all the hallmarks of a self-reinforcing episode of endogenous risk”.
Lloyd was long the whole time!
