This post was originally published on this site

Perhaps one of the biggest surprises of 2017 so far is the 10-year Treasury note yield at around 2.15 percent, closely followed strategist Mark Grant said Monday.

“Everybody and his brother was saying it was going to be at 3 percent by now. I said, ‘No, I didn’t think so,'” the Hilltop Securities chief strategist said on “Squawk Box.”

Grant spoke as the 10-year sat slightly down at around 2.148 percent on Monday morning. When asked when he thought the 10-year would hit 3 percent, he said, “no time soon.”

“I think the biggest shock is interest rates given what the Fed has done,” he said. “And for a lot of big institutions, it’s been a big pain trade.”

Late last month, Grant told CNBC he thought ‘the big equity run’ after the U.S. presidential election is over, and investors should employ a new strategy to make money. He reiterated his stance on Monday.

Grant said on the morning of Election Day in November that investors would be smart to buy stocks in the event of a surprise Trump victory.

That advice has paid off. Since the election, the Dow Jones industrial average has surged more than 16 percent, the S&P 500 has gained more than 13 percent and the Nasdaq composite has risen 18 percent as of Friday’s close.

On the Federal Reserve, Grant said at the moment he won’t take much of what the policymakers say as “valid,” considering President Donald Trump will appoint new people. He doesn’t expect another rate hike this year.

Jim O’Sullivan, High Frequency Economics chief U.S. economist, had different thoughts on the Fed. He said the next tightening move by the Fed in September is going to be balance sheet normalization.

“That was clearly the hint last week — assuming the economy chugs along OK, and labor market remains pretty solid — that in September they announce the start of balance sheet normalization and then they come back in December with another rate hike,” he said on “Squawk Box.”

He said it remains to be seen what impact the balance sheet normalization will have on the markets.