(Bloomberg) — Investors have little room to take advantage of the rally in US Treasuries now, with the Federal Reserve unlikely to cut rates as aggressively as the market expects, according to Mount Lucas Management LP.
Last week the $1.7 billion Pennsylvania-based hedge fund took profit in its discretionary macro fund on a long US Treasury position, which included bonds with maturities between two and five years built up over the last couple of months.
“There’s no more juice left to squeeze from that long bond trade for us,” said David Aspell, co-chief investment officer and partner.
Treasuries were little changed on Tuesday, with the policy sensitive two-year yield trading just above 4%. Traders await a key report on US producer prices that is expected to show the headline annual rate decelerating to 2.3% in July. Consumer prices are due on Wednesday.
Founded in 1986, Mount Lucas runs a mix of discretionary and…
