Street Signals
Is It Time To Buy Bonds?
Oct 12, 2023
Exploring the factors influencing bond market movements, historic parallels to the 1987 crash, stock-bond correlations and diversification, the stability of inflation expectations, and the value of bond yields and macroeconomics.
27:07
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Quick takeaways
- The recent dynamics in fixed income markets include a reversal of the rise in US 10-year yields and the potential impact of tightening policies at the long end of the curve.
- Bonds may no longer be a reliable diversifier due to changing risk preferences, issues related to bank portfolios and foreign reserve managers reducing treasury holdings, and the potential influence of mutual fund year-end portfolio adjustments on reducing bond holdings.
Deep dives
Bond market fluctuations and reversal of trends
The podcast discusses recent market events that have impacted bond markets, including the rise in US 10-year yields due to higher oil prices and the Federal Reserve's messaging on policy rates. However, there has been a reversal of this trend as some Fed officials talk about tightening policies at the long end of the curve. The podcast also touches on the recent events in Israel and the potential knock-on effects. Overall, the podcast explores whether this reversal is just a retracement or if it is indicative of a time to buy bonds more aggressively.
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