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Uncertain Over Curve? Stick With Steepeners

US TSYS
With the Fed likely on hold into 2023 and expressing willingness to let inflation run (if it ever gets to 2%), Wells Fargo macro strategists said "nominal Treasury bear steepeners .. are likely to gain".
  • Meanwhile, TIPS "should be the obvious winner" despite already having a "strong run. In our opinion, breakevens should gain for another month or so, then pause.
  • "Bear steepeners also should gain. Why? Basically the same rationale as for TIPS. The Fed is likely to let inflation expectations rise."

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