Sorry Harley, the 2 Year note is not for babies!
Regular readers will know that the 🐿️is a huge fan of the ‘Inside Baseball with Old Chestnut’ podcast. The show is a weekly conversation between Wall Street bond veteran Morris Sachs and his cycling buddy, Liam Allen. Their chat is the hugely enjoyable backing track to the Monday morning dog walk (after I have hit send on the weekly note).
In between the banter and the ‘Dad jokes’ lie an invaluable source of market learning nuggets accumulated over Morris’ 40-year career at the very pinnacle of global bond markets. The pair enjoy a running joke about the US Treasury 2-Year note, the ‘pole star’ of Morris’ daily analysis of the financial markets.
Yesterday a proud and lucky 🐿️ received one of the show’s limited edition 2-year note T-shirts in the post. These rare items are so sought after that they are even being bootlegged by fellow IBWOC fans up north in Queensland! How fitting that its arrival should coincide with a 2-year note (related) Acorn trade.

2023 has been the year when the much-anticipated US recession failed to show up. The 🐿️ was pretty sure that the aggressive interest rate hikes of 2022 would feed through into the economy and consequently had a very painful Q1 of this year betting against the strength NASDAQ large cap technology and (especially) semiconductor stocks (usually terrible stocks in a recession).
The runaway freight train that I did manage to dodge was to not join the crowds swarming into long duration fixed income in anticipation of the Fed and other central banks easing up on their tightening of monetary conditions. Until very recently, the pain in those markets has continued unabated.