Citadel’s Head of Economic Research for Fixed Income and Macro, Angel Ubide, has described the US economy and labour market as being in a “fragile equilibrium,” with long-term Treasury yields serving as a key barometer for risk assets, according to a report by Bloomberg.
“The economy is on the good side of a fragile equilibrium, especially with the labour market, but we are close to the edge,” said in an interview, highlighting low unemployment, stable consumer health, and a monetary policy stance leaning towards easing as a “happy combination” supporting risk-taking.
Ubide is closely watching 30-year Treasury yields, noting that any rapid rise above 5% could pressure equities and other risk assets. Yields on the long bond recently approached this level before falling to around 4.7% amid weak US jobs data, which led traders to price in a 25-basis-point Federal Reserve rate cut next week.
On currency markets, Ubide flagged the US dollar’s 8% decline this year, driven by fiscal concerns, trade tariffs, and geopolitical risk. He suggested the greenback may be entering the early stages of a sustained slide, with investors gradually diversifying away from dollar-denominated assets. “Rebalancing away from dollar assets as a geopolitical hedge is going to take years to play out,” he said.
