Bond Yields Will Probably Stay Low

The bond market continues to cause confusion for experts, writes a Charles Schwab strategist in a recent Barron’s article. Since the end of the recession in 2009, it argues, “consensus expectations have called for higher bond yields and the death of the 35-year bond bull market. Yet, 10-year Treasury yields are now nearly 200 basis points lower than in 2010.” The author opines that, although economic conditions support bond yields above 2%, market expectations are not aligned with the Fed’s plan to continue tightening monetary policy in the second half of the year. “The divergence in these expectations,” it says, […]

Gundlach on Bond Yields and the Broader Market

The market would be hurt if yields on 10-year Treasuries climbed to 3 percent or higher next year, says Jeffrey Gundlach as reported in Bloomberg. The DoubleLine Capital CIO has called president-elect Trump’s policies “bond unfriendly” and says that Treasury yields above 3 percent (benchmark Treasuries are currently trading below 2.5 percent) “would start to have a real impact on market liquidity in corporate bonds and junk bonds.” Gundlach says that he will be looking for signs that “Fed members are growing inclined to raise rates more aggressively in the next couple of years as the economy heats up.” Gundlach’s […]

Grant Goes Heavy Metal

If you were to ask Jim Grant, the seasoned and sage founder of Grant’s Interest Rate Observer, where the markets are headed, you wouldn’t hear many minced words. During a recent Barron’s interview, the 70-year old Navy veteran said:  “We’re on the road to an important perception that central bankers don’t have the answers and are in fact in the process of discrediting the very money they are meant to protect.” Grant, founder of the Observer over 33 years ago (and the Barron’s Current Yield column in the 1970’s) is viewed by many as one of the most astute market […]