Rates, the curve, inflation and the central banks that move them.
Check all three legs, marketability, cheap money and a population buying for resale, before calling something a bubble.
Answering whether a current market is a bubble, or explaining why some overvalued assets never become one.
From Boom and Bust · William Quinn and John D. Turner
Term premium is an estimate from a model; say which model, and treat the level as less certain than the direction.
Any rates conversation that invokes the term premium, and any question about why long yields moved while policy did not.
From Treasury Term Premia: 1961-Present · Tobias Adrian, Richard K. Crump, Benjamin Mills and Emanuel Moench, Federal Reserve Bank of New York (Liberty Street Economics)
Supply shocks faded on their own; the hikes anchored expectations so the fading could happen. Credit both, in that order.
Macro and rates interviews, and any debate about central bank credibility.
From The contribution of monetary policy to disinflation · Pongpitch Amatyakul, Fiorella De Fiore, Marco Lombardi, Benoit Mojon and Daniel Rees, Bank for International Settlements (BIS Bulletin No 82)
Ask where a market is in the sequence rather than whether it is a bubble; the stages are more recognisable than the verdict.
Any market history question, any debate about whether a current theme is overdone, and macro interviews.
From Manias, Panics, and Crashes · Charles P. Kindleberger
A prepayable bond gets shorter when rates fall and longer when they rise; the spread you are paid is for that asymmetry.
Fixed income, securitised products and mortgage finance interviews, and any question about why mortgage rates move with MBS rather than the policy rate.
From Mortgage-Backed Securities · Andreas Fuster, David O. Lucca and James Vickery, Federal Reserve Bank of New York (Staff Reports)
A bank's margin in a hiking cycle is decided by how slowly it reprices its deposits, measured as the deposit beta.
Bank earnings, FIG coverage, and any interview that asks how rising rates affect a bank.
From Is This Time Different: How Are Banks Performing during the Recent Interest Rate Increases Compared to 2004-2006? · Anya Kleymenova, Lori Leu and Cindy M. Vojtech, Board of Governors of the Federal Reserve System (FEDS Notes)
Find the narrowest step in a supply chain; that is where the risk, the pricing power and the politics all sit.
Technology coverage, macro and geopolitical questions, and any discussion of moats in hardware.
From Chip War · Chris Miller
In physical commodities the money is in moving, financing and accessing the cargo; the price direction is usually hedged.
Trading house and commodities interviews, and any analysis of a business that moves physical goods.
From The World for Sale · Javier Blas and Jack Farchy
A steepening is mostly term premium; a move in the two-year is half expectations, half premium. Use the rule, then say which model you trust.
A markets interview asks why long yields moved, or a desk needs a quick decomposition before the models update.
From The Treasury Tantrum of 2023 · Anthony M. Diercks and Dev Asnani, Board of Governors of the Federal Reserve System (FEDS Notes)
An inverted curve is the market expecting cuts; read the near-term forward spread, because the long spread is diluted by the term premium.
Rates, macro and sales and trading interviews, and any time a headline says the curve has inverted.
From (Don't Fear) The Yield Curve · Eric Engstrom and Steve Sharpe, Board of Governors of the Federal Reserve System (FEDS Notes)