GLJ Research’s Gordon Johnson, an underground research analyst whose work I follow and like, is out with a new macro note this week arguing that one of the most important signals in the bond market has quietly returned to levels last seen before the post-financial-crisis era of easy money.
Johnson is one of my favorite analysts on the street to read and gets a rare endorsement from me (I hate basically everyone selling sell-side style research).
He is one of the last few analysts out there that seems committed to the truth….no matter how ridiculous it makes him look in the short term while he’s waiting for his theses to play out.
His conclusion is straightforward: the normalization in interest rates that investors have spent years waiting for may have already happened, and anyone waiting for Treasury yields to eventually collapse back toward the ultra-low levels of the 2010s could be waiting for something that isn’t coming. Here’s how he makes his case, risks to his view and how he’d position himself given his analysis.