Bonds have once again become bonds
The forces driving yields higher are unlikely to disappear, but at least we are back to near-normal levels.
Deutsche Bank's global head of macro analysis says that while forces driving up bond yields are unlikely to disappear, they have returned to near-normal levels after a decade of financial repression. The recent global bond sell-off has raised concerns about unsustainable public finances, but the analyst believes this is a continuation of the normalization process after the anomaly of the 2010s.
In the US, inflation has exceeded the Federal Reserve's 2% target for over five years, and growth has held up better than expected, with a 6.6% nominal GDP growth in the second quarter. The analyst notes that bond yields are likely to remain high due to strong government issuance, central banks' withdrawal from quantitative easing, and persistent inflation.
Written by urgent.news from Expansion ES's report — not a translation of it. Machine-written — may contain errors; check the original before relying on it.
