What if JPOW lost control of the long-end?
A 🐿️ insurance policy in the event that the long bond is not the perfect recession hedge for investors.

Summary
The conventional recession playbook for investors is to buy the long bond. What if that does not work this time?
What if the market response to a recommencement of rate cuts by the Fed is a “buyers strike” induced RISE in long end treasury yields?
This has not happened before. Therefore it is very hard to make this a ‘base case’ view. However, the 🐿️ is always attracted to expressing views on outcomes which we think that the market is potentially under-pricing.
We have bought a $110/$100 (2x1) put ratio backspread on TLT, the iShares 20+ Year Treasury ETF. This is not for all tastes, so we also discuss Harley Bassman’s PFIX as a simpler alternative.
What if the standard recession playbook is wrong?
We are not big believers in ‘soft landing’ or ‘no landing’ economic scenarios for the US economy. Yes, Chase
we see your lag reaper! The ‘long and variable lags’ [of rate hike im…