A quick word on the Fed: my view is unchanged. The Fed does not need to hike for some time yet. I think a hike in Q3 would be a major policy error and would occur because the Fed has made some pre-determined decision to reload its monetary policy ammo before it’s too late.
In other words, I think the Fed is caught between a rock and a hard place. Let’s see but based on what is in front of us right now, any hikes by the Fed would add significant risk to markets, risk assets in particular.
For US Treasuries, if the Fed does hike, I think its hiking cycle would likely be 2 x 25bp and done, which to me would make 2s20 and/or 5s30s curve flatteners very attractive.