I’ve warned twice in the last year that negative carry makes the path to profit an uphill battle. The curve is now >50bps steeper since the first post — if you put the trade on, you’d be directionally right and very slightly poorer. The 2s10s steepener might be a good story, but it’s never been much of a trade.

You'd need to go back to the mid-1990s to find richer credit markets. So, sell credit? Not so fast. Remember, perspective matters.

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Short-end rates are headed down and the curve is headed steeper. At least that’s the fat part of the distribution of probable outcomes…So, engage the steepener, close your eyes and pop your head out on Groundhogs day? Read more for our view.