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You might want to lock in a nominal return of 4.5% for 8 years if you expect rates to go down in the future.
Doesn't sound attractive to me, but there are some who might want to do that.
does it matter that much if you're just using the long bonds for a short-term trade? (Essentially, riding the implied leverage)
you would do that if rates fell sharply below 4.5 after the one year. Then you would be glad to have "locked in" guaranteed 4.5. Also inflation would have to fall well below that for the return to be appetizing.
In other words: only theoretically, not happening in practice. Only banks who are forced by law to do it, do it.
Duration... Bond convexity.
(he hinted at it in the piece, lower inflation post-Iran peace is gonna rally the long bonds more than the short. Some resources here #1430666)
disagree with his take, or the trading implication of his assessment?
I wouldn't be lending the British Government money for 8 years at 4.5%. Why would you do that when you can get 4.19% on a 1 year?