Pandemic: The Unforeseen Catalyst

The cycle of economic analysis over the past decade has focused on anticipated crises, yet the actual tipping point was an unforeseen pandemic, illustrating how real-world events can disrupt long-standing economic narratives. There was little warning of significant imbalances in developed economies, and existing fears were unfounded as the credit cycle did not present immediate threats. With a historical perspective, downturns in bond markets have often followed significant historic events, and the current climate suggests we are witnessing a generational shift in real interest rates, moving towards higher yields due to an accumulation of crises, including the recent pandemic.