Helping bond investors find what's rich or cheap, and why. Macro, rates & MBS today. Munis, ABS & corporates next.
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We're live!
Today, I'm excited to bring @OasiveAI out of stealth and announce that we're backed by @ycombinator!
Oasive helps bond investors find better bonds to buy.
Uncover opportunities you might otherwise miss, compare investments and test the risks before putting on a trade.
Which Treasury maturities look cheap? Is there a curve trade worth putting on? Macro and Rates Research helps you explore both. In mortgage-backed securities (MBS), compare pools and see how changes in rates and prepayments affect your portfolio.
Our AI analysts bring the research and proprietary models together, so you can go from idea to decision in minutes.
Thank you to @kul and @garrytan for taking a chance on me and believing in @OasiveAI!
Start your Macro and Rates Research free trial or request an MBS demo: oasive.ai/join
Here's what you can do 👇
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Oasive (YC F26) retweeted
I don’t usually pay much attention to crypto or stablecoins, but this one caught my eye: it could matter for Treasury demand!
The Fed’s proposed framework would require stablecoin issuers it supervises to fully back tokens with approved liquid assets, including T-bills.
More stablecoins could mean more demand for bills. With Treasury planning to increase bill auction sizes in October, that demand could help absorb supply and ease upward pressure on bill yields.
Chart below from @OasiveAI's research
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Oasive (YC F26) retweeted
If you look at fair value comparison across the yield curve, things still look pretty cheap in the belly/front-end (i'd discount bills because the model is pretty much pricing fed expectations there)
If you want more info on how I built the @OasiveAI model, DM me or check us out: oasive.ai/join!
I feel like I read “Treasury yields at their highest since…” every day now. It’s getting a little repetitive! This time, it’s the 30y at a 22-year high.
Oil, resilient growth, more Fed hikes priced in and heavy government borrowing help explain the move.
Our @OasiveAI fair value models still disagree on the 30y: XGBoost and CatBoost suggest cheapness, while Ridge regression doesn’t. Some of that disagreement may reflect how differently the models respond to a higher-rate environment.
With more government debt for investors to absorb, some of that extra yield may be compensation they require. I still wouldn’t call long bonds a bargain just because yields look high!
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Oasive (YC F26) retweeted
I feel like I read “Treasury yields at their highest since…” every day now. It’s getting a little repetitive! This time, it’s the 30y at a 22-year high.
Oil, resilient growth, more Fed hikes priced in and heavy government borrowing help explain the move.
Our @OasiveAI fair value models still disagree on the 30y: XGBoost and CatBoost suggest cheapness, while Ridge regression doesn’t. Some of that disagreement may reflect how differently the models respond to a higher-rate environment.
With more government debt for investors to absorb, some of that extra yield may be compensation they require. I still wouldn’t call long bonds a bargain just because yields look high!
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Oasive (YC F26) retweeted
Initial jobless claims fell to 197k, and the 4w average dropped to 202k. Layoffs remain low.
Hiring has slowed more than layoffs: the latest JOLTS hires rate was 3.2%, down from 3.4% in June, while layoffs were 1%. That mix can keep unemployment stable even as finding a new job gets harder.
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Oasive (YC F26) retweeted
US business growth accelerated for a 4th straight month in September, reaching its fastest pace in >5y! Businesses’ costs are also rising at their fastest pace in nearly 4y.
Strong demand gives companies more room to pass those costs on, making inflation harder to bring down. This gives the Fed very little reason to stop tightening. Rates are not coming down any time soon!
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Oasive (YC F26) retweeted
About half of US mortgages still carry rates of 4% or lower, and nearly 80% are below 6%. That lock-in cuts both demand and supply. Fewer people want to buy at today’s rates, but fewer owners want to sell and give up cheap financing.
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RT @AnaisHowland18: New-home sales picked up in August, but the number of new homes available for sale barely changed.
That’s why the drop…
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Oasive (YC F26) retweeted
Yesterday’s Treasury selloff hit the belly of the curve hardest. Official closes show the 3y, 5y and 7y yields each rose 16 bps, while the 30y rose 11.
The 10y real yield increased 13 bps, almost matching the 15 bps nominal move. Higher real rates and a repriced Fed path did most of the work, with much less movement in long-run inflation compensation.
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Check our treasury research!
Are Treasuries rich or cheap?
At @OasiveAI, we built fair-value models for the Treasury market. Here’s what they tell us.
As of Sept. 18, all four estimates put 2-year and 5-year Treasuries on the cheap side. At 10 and 30 years, the models disagree.
My take: the 2-year is the most interesting place to look. But understanding why it looks cheap matters as much as the number.
I’ve put the charts and research findings in the replies below 👇
DM me if you’d like the full report!
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Oasive (YC F26) retweeted
I'm less reassured by calm corporate bond markets when the weakest borrowers are telling a different story.
Since July 1, the extra yield investors demand to hold bonds rated CCC or lower has risen by 1.15 percentage points. For investment-grade bonds, it's barely changed.
To me, that says investors are getting more selective about who can handle expensive debt. I'd watch out for contagion to stronger borrowers.
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Oasive (YC F26) retweeted
I’m not reading too much into today’s Chicago Fed activity number.
The activity index came in at -0.04 for August, slightly below its usual growth pace. But the three-month average is still almost exactly at trend.
For now, I’d call that noise. I’d want to see a more sustained slowdown before getting worried.
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Oasive (YC F26) retweeted
Who holds US debt matters.
Over the year through July, private foreign Treasury holdings rose about $252bn, while foreign official holdings fell $113bn.
For overseas investors hedging their currency exposure, the headline Treasury yield is only part of the calculation. What they earn after protecting against a weaker dollar matters too.
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Oasive (YC F26) retweeted
Diesel deserves more attention in the inflation debate and the pressure is global.
Supply losses in the Middle East, Russia and China are tightening the market. In the US, refineries are slowing down for maintenance just as farmers need more fuel for harvest, leaving less diesel in storage.
Even if crude oil gets cheaper, moving goods and growing food could stay expensive for a long time.
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Oasive (YC F26) retweeted
August industrial output was flat, but manufacturing fell 0.3% after seven monthly gains. Utilities rose 1.8%, masking the softer factory picture. If that weakness persists, it complicates the case for more tightening.
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Oasive (YC F26) retweeted
The price of uncertainty is hiding inside “priced-in hikes”.
The BoE’s September minutes describe a UK short-rate curve reaching around 4.9% by end-2027. They attribute much of its upward slope beyond the near term to risk premia: compensation for uncertainty.
The implication: forward rates can fall as that premium fades, even without a big change in expected policy. Counting every basis point as another hike misses that distinction.
The Bank of England held rates at 3.75%. Its bond portfolio is still heading toward the exit.
The new plan unwinds £368bn of monetary-policy gilts through maturities and £20bn of annual sales.
For bond investors, the policy rate is only part of the story. Who absorbs the debt matters too.
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Oasive (YC F26) retweeted
A rate hike tomorrow could still send bond yields lower.
What matters is how much tightening the Fed signals after this meeting, relative to what investors already expect.
A 25bp hike paired with room to pause sends a very different message from a hike paired with a faster, higher rate path.
I’ll be watching the new dots, the conditions for another move, and whether the initial reaction survives the press conference.
The decision changes today’s rate. The guidance can change the valuation of the whole path ahead.
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Oasive (YC F26) retweeted
The past two weeks have put Fed hikes firmly in focus.
The repricing started with August payrolls: +162K against ~53K expected. Last week’s firm core CPI and nearly 10% oil surge added to the pressure heading into the Fed.
Bonds led last week’s reaction: the 2Y yield jumped 29bp, the curve flattened, and rates volatility rose sharply.
Credit barely flinched. Equities fell, with small caps and health care taking a bigger hit than the S&P headline suggests.
The tension heading into the decision: a sharp repricing of rates, with limited spillover into credit so far.
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Oasive (YC F26) retweeted
Quick market update from yesterday’s volatile trading day:
An oil shock did the damage. WTI ripped +3.0% to $94.25 on Houthi strikes against Saudi energy infrastructure, and equities sold off broadly into it (S&P -0.58%, Dow -1.18%) with the curve drifting 2bp higher across the strip. The Dow's underperformance was idiosyncratic, not macro — Amgen's ~10% collapse on the Novartis pelacarsen failure took health care down -2.5% and dragged the price-weighted index. The Fed is the live risk into next week: 60% of the Sept 16 meeting is now priced for a hike to 3.75-4.00%, with an energy-driven CPI print landing Friday.
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