Unhedged What are UK bonds thinking?
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Jan 14, 2025 US bonds and UK gilts are in sync, facing a downward trend. The hosts dissect whether UK Chancellor Rachel Reeves holds the blame or if it's a global phenomenon. A playful term, “Brovid,” is introduced to describe the rise of online edgelords. With UK bond yields at a notable low, discussions touch on the role of U.S. economic trends, and there are critiques of current philosophical discourse in the investment world. Tensions between central bank policies and market responses add to the intrigue.
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UK and US Bond Correlation
- UK bond yields have risen sharply, mirroring a similar rise in US Treasury yields.
- This suggests that global factors, rather than UK-specific issues, are the primary drivers.
US Economic Outperformance
- The US economy continues to outperform other global economies, growing above its long-term trend.
- This strong growth contributes to rising US bond yields.
Unusual Bond Market Behavior
- Long-term US bond yields are rising despite the Federal Reserve cutting interest rates, defying typical market behavior.
- This suggests the market expects future uncertainty or inflation.