You need a PLUS account to view this content. Try one month of PLUS for FREE.
Already have an account? log in
Why US Bond Yields Should Be Far Lower
Bond yields should be higher. It's easy to make the case. I do it all the time. Typically by referen
I manage my 90 year old father’s portfolio on his behalf. 100% in USTs.
He has some USTs maturing on March 31 which I will reinvest; just as this post suggests.
I feel better already.
I’m not one to quibble with Morgan Stanley and am not familiar with the length of the time series’ behind their model, but the immigration-led disinflationary growth thesis feels reachy to me. I mean it’s interesting and I hope it’s true, but is it really too simplistic to think that after an unusual and unusually persistent stretch of negative reals, nominals are not going to march in lockstep back down with inflation, after chasing it for 3+ years? Reals are up 300 bp in a little over 2 years. but are only back to what not too long ago were considered “normal” levels. Maybe this is just the new normal until the market, like the Fed, “has gained greater confidence that inflation is moving sustainably down toward 2 percent.” But while the Fed may be broke, it’s bondholders who got burned (or burned up if you were an unlucky bank). So maybe it’s just a little risk premium, or a catch up bonus if you like, gumming up the works a bit.
It’s hard to side with Ian Hunter and Mick Ronson over Morgan Stanley here, but they were warning about exactly this kind of thing way back in 1975 (with a hat tip, likely, to Aesop). And you didn’t need charts — just a radio.