Is now the time to buy US Treasuries?

We had US CPI data today. It was weak. The UST market has rallied. Perhaps the death of American assets has been exaggerated? 

Is now the time to switch your bonds into the US? 

The common consensus is that US Treasury bonds may lose their safe haven status in coming months. Short term economic uncertainty, exacerbated by Trump's tariff tiffs is one thing. A 7% Federal Budget deficit and nearly $35trillion of Government borrowing is quite another.

There is a clear danger the US inadvertently loses its privileged position on the pinnacle of the world's capital mountain. That may take some time.

And markets have already adjusted. The US Dollar is weak. The Treasury market offering yields around 2% above German and (whisper it) nearly 1.5% higher than Italy. There a big consensus to play "curve steepeners" - own short bonds because the Fed will be bullied to cut, avoid long bonds because Donald loves to borrow. 

Of course, the yield curve has already steepened, the relationship between 5 and 30 year bonds, recently flat, now so steep it signals recession.

Thankfully, we've had those trades on - own Germany or Australia but don't buy anything in the US with a long maturity. Now everyone is jumping on the bandwagon, maybe it's time we got off?

A case in point - core US inflation only rose 0.1% in May. The market had expected 0.3%. With some signs the US and China may agree an inflation curbing trade deal, perhaps the market has pushed US assets too low? 

Longer term that budget deficit remains worryingly high. Shorter term, US Treasuries may be about to have a moment in the sun. Probably still wise to hedge the Dollar though - and a weakening economy might not be great even for the Magnificent Seven.