Thomas Hempel, head of macro and market research at France-based Generali Asset
Management, said in a note the case for a Fed rate hike in September remains
finely balanced, so the firm remains cautious on long-duration bonds. He said
the view that the Fed will raise rates once after the midterm elections is
closely contested; stickier July core PCE and hawkish remarks at Jackson Hole by
Fed chair Kevin Warsh have raised the risk of an earlier hike. Generali expects
long-term Treasuries to range trade but sees the balance of risk to US long
yields tilted to the upside.
