Worth watching Currie interview
March 15, 2026 – Weekly comment
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BIG jump in yields over the past week. The 2y surged 18.4 bps from 3.548% (essentially the bottom end of the FF target range of 3.50-3.75%) to 3.732% (just under the top of the target range). Tens and thirties rose just over 15 bps to 4.279% and 4.904%. On the SOFR futures strip, SFRM7 was weakest, down 20.5 bps to 9656 (3.44%). Peak contracts are now a bit further back: SFRZ7 and SFRH8 at 9663.0 or 3.37% or just about one-qtr pct lower than current EFFR of 3.64. Since the invasion, the market has squeezed out easing prospects from about 3 qtr-pt cuts to just 1.
Fascinating BBG interview with Jeff Currie, commodity guru at Carlyle (formerly at Goldman). It’s about 8 minutes long. His main theme is that infrastructure damage and Hormuz closure is a hugely disruptive global supply chain issue that will lead to an economic regime change. Key line: “There is NO policy response that can stop this ascent in crude. None.”
https://twitter.com/search?q=currie&src=typed_query
But there are a couple of other comments which perhaps shed some light on US bond weakness. Currie notes that prior to 2022, an oil shock in which excess dollars accrued to oil producers (OPEC), would tend to be recycled into US Treasuries, in effect cushioning the inflationary blow of higher prices, This influx of capital into the US acted similarly to QE. However, since the US and Europe froze Russian assets, that money now goes into gold, not US denominated assets that might be subject to sanctions. Currie recomments HALOs, Heavy Assets, Low Obsolecense…i.e. old economy companies rather than the ‘asset lite’ model which had been in place.
Having said that, this week’s price action featured USD strength, with DXY ending at 100.362, its highest level since May 2025. Gold closed the week near the low at 5019.49.
For now, the rise in the price of oil is being viewed through an inflationary lens. In the month from Friday, February 13, to Friday, March 13, CLJ6 has risen 57%, from 62.75 to 98.71. Currie warns of additional demand due to hoarding, and certainly the fear of unavailable supplies conjures up memories of the great toilet paper run during covid. Or, for those of an earlier vintage, John Denver (of Rocky Mountain High fame) installing gas tanks with a capacity of 30k gallons at his property in Colorado in the early 1970s).
In mid-June 2013, with US FF at zero, Bernanke hinted at a possible end to QE, The market was unprepared and Eurodollar contracts plunged, with near contracts falling below 9950, even though there was no indication of an actual rate hike. Recovery took a few weeks. The current wash-out in SOFR contracts reminds me of that period. With a variety of other factors already threatening economic growth (private credit issues, weak jobs sparked in part by AI, loss of immigrant demand) it’s hard to imagine the Fed considering a shift to higher rates, even with a shift to higher inflation. However, the market is starting to reflect that concern.
From here, if oil accelerates I would expect the major stock indexes to suffer, thus supporting treasuries. And, if oil falls, then I would expect slightly diminished inflation expecations, which should also supprt UST. A previous slogan was ‘buy bills and chill’, but at this point I would think ‘stand aside, take five’ makes sense. The 5y yield is 3.87%. Sure, PCE yoy is 2.8% with a large risk of higher (Core 3.1%), but there’s something to be said for sitting out what could be a significant drawdown in stocks.
This week features several Central Bank meetings: US and BOC on Wednesday. ECB, BOE and BOJ Thursday. As an indication of relative moves, below are CB base rates. And then Sept’26 futures of each, from Feb 27 until Friday:
Base rate Sept’27 on 2/27 Sept’27 on 3/13 Net Change
Fed 3.625 9677.5 9644.0 (3.56%) 33.5 bps
BOC 2.25 9781.5 9743.0 (2.57%) 38.5
ECB 2.15 9800.5 9752.5 (2.475%) 48.0
BOE 3.75 9676.0 9608.0 (3.92%) 68.0
| 3/6/2026 | 3/13/2026 | chg | ||
| UST 2Y | 354.8 | 373.2 | 18.4 | |
| UST 5Y | 371.0 | 387.0 | 16.0 | |
| UST 10Y | 412.7 | 427.9 | 15.2 | |
| UST 30Y | 475.2 | 490.4 | 15.2 | |
| GERM 2Y | 230.7 | 243.7 | 13.0 | |
| GERM 10Y | 285.8 | 298.0 | 12.2 | |
| JPN 20Y | 299.4 | 312.1 | 12.7 | |
| CHINA 10Y | 179.8 | 182.4 | 2.6 | |
| SOFR M6/M7 | -33.5 | -19.0 | 14.5 | |
| SOFR M7/M8 | 4.0 | -5.0 | -9.0 | |
| SOFR M8/M9 | 17.0 | 12.0 | -5.0 | |
| EUR | 116.18 | 114.17 | -2.01 | |
| CRUDE (CLK6) | 87.52 | 96.84 | 9.32 | |
| SPX | 6740.02 | 6632.19 | -107.83 | -1.6% |
| VIX | 29.49 | 27.19 | -2.30 | |
| MOVE | 81.26 | 91.17 | 9.91 | |
