What the Bond Sell-off Means for Investors | Andy Constan & Mike Green

11 snips

Oct 10, 2023

Guest

Mike Green

Guest

Andy Constan

"What the Bond Sell-off Means for Investors" features Andy Constan, a bond market expert, and Mike Green, an analyst. They analyze the recent turmoil in the bond market, discussing the rise in long-term government debt and its implications for the economy. Topics include the risk-reward for investors considering bonds in their portfolio and the challenges of forecasting economic activity, interest rates, and inflation. They also explore the impact of long-term interest rates on the housing market and the divergence between stock and bond returns.

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Introduction

00:00 • 3min

Analysis of Payroll Numbers and Market Response

03:17 • 4min

The Challenging Environment of Forecasting Economic Activity

07:32 • 28min

Analyzing Regional Bank Crisis and the Process of Demand Destruction

35:10 • 4min

Impact of Long-Term Interest Rates on Housing Market and Equity Jaws

39:09 • 11min

Exploring Bond Market Risks and Scenarios for Steepening

50:38 • 2min

In Episode 331 of Hidden Forces, Demetri Kofinas speaks with Andy Constan and Mike Green after a week of turmoil in the bond market that saw a dramatic repricing of long-term government debt, raising debt servicing costs for the US government and sending yields on 10-year Treasury bonds to nearly 5%.

Demetri, Andy, and Mike spend the first hour of their conversation trying to make sense of the recent sell-off, as well as what the implications of these higher long-term interest rates will be for the economy and asset markets.

The second hour is dedicated to discussing the risk-reward calculus for investors who are trying to decide whether or not they want to use this opportunity to add bonds to their portfolios, in what amount, over what duration, and what the risks and opportunities are of doing so given the continued uncertainty about the direction of interest rates and inflation.

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Episode Recorded on 10/06/2023