Economic Overview - February economic data shows mixed signals, with retail and housing sales declining, indicating a potential "stagflation" scenario[2] - January non-farm payrolls increased by 143,000, with the unemployment rate dropping to 4.01%[54] - CPI for January recorded a year-on-year increase of 3%, reflecting inflationary pressures despite some economic slowdown[48] Bond Market Insights - The 10-year U.S. Treasury yield is expected to find a low point around 4%, with the 10Y-2Y yield spread narrowing or even inverting[5] - In February, the yields for 30Y, 20Y, 10Y, and 2Y Treasuries changed by -29.7, -31.7, -33.1, and -28.2 basis points respectively[3] - The total issuance of U.S. Treasuries in February was $2.4 trillion, down from $2.63 trillion in January[19] Market Strategy Recommendations - The report recommends going long on long-duration Treasuries, including TLT, TMF, and 10-year and above Treasury futures[5] - The strategy is based on anticipated "bull flattening" in the bond market due to economic conditions and shadow "QE" from the Treasury[5] Risks and Considerations - Potential risks include an unexpected slowdown in the U.S. economy, faster-than-expected rate hikes by the Federal Reserve, and worsening geopolitical conditions[6] - The market is pricing in 2-3 rate cuts by the Federal Reserve in 2025, higher than the previous expectation of just one[4]