Limited impact of Quantitative Tightening on bond yields?

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kellyfj
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Limited impact of Quantitative Tightening on bond yields?

Post by kellyfj » Wed Jun 13, 2018 11:56 am

As the US Federal Reserve accelerates it's quantitative tightening I am surprised to see an analysis suggesting only a limited impact on bond yields
. . .as the cap moves higher, balance sheet normalization will
likely steepen the yield curve with long-term Treasury yields increasing
by an estimated 10-15 basis points, while short-term Treasuries will
likely experience minimal impact. We expect this to be an issue
starting in 2018 when Treasury runoff reaches $12B/month.
https://www.wellscap.com/pdf/expert_com ... n-plan.pdf

Is anyone aware of other views on the possible outcomes of the tightening program?

Thanks!

Frank

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