Tumble in bond yields will lead to 'the trade of our lifetime' in this investor's scenario

Lawrence McDonald
Scott Mlyn | CNBC

The cascade in bond yields and a continued call for more spending from Washington will result in "the trade of our lifetime," said Lawrence McDonald, a Wall Street veteran and author of the Bear Traps Report.

As yields fall toward zero, policymakers will be forced into action with expensive stimulus spending that will create a new wave of debt issuance, pushing yields higher, said McDonald, a former Lehman Brothers executive and special advisor to the Financial Crisis Inquiry Commission.

A variety of sectors will benefit, including energy and banking, he said.

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