Expect US 10-yr yields to continue at 2.5% levels: Solaris

Tim Ghriskey, CIO, Solaris Asset Management, in an interview on CNBC-TV18 said the 2.5 percent is a better reflex where the 10-year yield should be in the current environment, given the long-term inflation expectations than it was trading at previously.

He feels that the markets overreacted to the statements of the Fed just trying to warm the markets up to the idea that eventually the asset purchases have to be pulled back, but the Fed is in no hurry to do that. Also Read: US bond yields may stabilise at current levels: HSBC Below is the verbatim transcript of Tim Ghriskey's inverview on CNBC-TV18. Q: If the markets are akin to a beauty context, the Miss risk-on is winning today, isn't she?
A: She certainly is and we have had a couple of good days and like your last guest said it correctly that the market overreacted to the statements of the Fed just trying to warm the markets up to the idea that eventually the asset purchases have to be pulled back, they have to be tapered, but the Fed is in no hurry to do that. Q: If that is the case, why are we seeing the dollar continuing to strengthen and the 10-year yield not budging much from the 2.5 percent mark?
A: The 2.5 percent is a better reflex where the 10-year should be in the current environment, given the long-term inflation expectations than it was trading at previously. So this is the level where we think buyers are going to come into the market, the insurance companies and other institutions that need bonds where they are comfortable buying the 10-year currently. We think that is where it belongs.