Jefferies global economist Mohit Kumar says the firm continues to avoid the long
end of the yield curve. He cites rising rates driven by both inflation and
fiscal-deficit concerns, and views medium-term risk from widening deficits as
larger than oil-driven inflation. With no clear US or European moves to rein in
deficits and sovereign and corporate issuance set to remain elevated — and
possibly rise over the next few quarters — Jefferies expects long-end government
and corporate bonds to remain under pressure.
