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Lacy Hunt: Treasury Curve to Flatten at Zero and Get Stuck There for Long Time

Submitted by Taps Coogan on the 2nd of May 2020 to The Sounding Line.

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Hoisington Investment Management’s Dr. Lacy Hunt recently spoke with Erik Townsend of MacroVoices to discuss with outlook for the economy and interest rates. Dr. Hunt, who has been correctly been forecasting lower treasury rates for several years, elaborates on his outlook in light of short term rates having reach the zero bound. Dr. Hunt argues that our over-indebtedness will produce “very weak” economic growth moving forward, leading to mild deflation, and pinning the entire treasury yield curve to near-zero for a long period of time.

The interview doesn’t lend itself to the excerpts that we typically provide, so enjoy it in full above. I strongly recommend it.

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