Frank Flight, head of macro strategy at Citadel Securities, has reversed his bearish position on long-term US Treasuries. In a client report dated August 25, he justified this change by two factors: overcrowded bearish positioning in the Treasury market and improving inflation data, now consistent with disinflation. This reversal comes just eight weeks after he warned fixed-income investors to brace for a « cruel summer » of rising yields and hawkish Federal Reserve action. Flight now sees risks skewed toward lower yields, meaning bond prices are more likely to rise than fall.
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