GlobalData TS Lombard: Perkins Vs Beamish The Bond Market Meltdown
Jan 13, 2025
Explore the chaos in the bond market and what factors are fueling the turmoil. Dive into insights about Trump's return and the contradictions in his economic policies post-election. Discover the urgent need for stimulus in China as the country reshapes its fiscal strategies. There's a fascinating look at the historical parallels between past and present political dynamics. Finally, gain insights into future investment strategies that can navigate these turbulent waters.
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Bond Market Resilience and Risks
- The bond market carnage is mainly due to the US economy showing resilience against expected recession fears.
- Future risks lie in increased term premium driven by potential disruptive Trump policies like tariffs and supply shocks.
Inflation Regimes and Market Effects
- Rising volatile inflation from negative supply shocks leads to positive bond-equity correlation and a tougher trading environment.
- This scenario challenges traditional portfolios and complicates market forecasting amid inflation stabilizing above target.
Trump Administration's Policy Clash
- Trump's administration faces a clash between pro-tech 'brotocracy' and MAGA worker-focused policies.
- The resolution between these conflicting directions will heavily influence market volatility and economic outcomes.