If you put a large amount of faith in the copper/gold relationship as the sole explanation for US treasury yields (which we don’t think one should, but still, people do) you would be anticipating yields closer to the 3% mark.
That’s a key driver of the bearish argument to both stocks and bonds (unambiguously bad for bonds, where your carry gets overwhelmed by the duration if yields were to return to 3%, and plausibly bad for stocks in that the discount rate would be higher and would get there quicker than what’s “priced in”, causing equities to sell-off alongside bonds).
We view the magic number as a range between 2.25-2.5%. A threat to long duration growth stocks, and may well cause a market that is expensive, to our minds, to sell-off, but not dangerously so, and in any case we are well positioned to take advantage of any such correction caused by such a “taper tantrum”.
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