Trump May Spark a Bear Market for Bonds

(New York)

In an article that argues exactly the opposite of our own house view, the Financial Times is contending that Trump may be about to spark a bear market for bonds. They argue that the best analogue to the present is the middle of the 1960s, when the economy was strong, inflation was low, and there was a lot of fiscal activism, including tax cuts and heavy spending. Between 1965 and 1970, when inflation had taken off, bond investors had gotten hammered, losing an estimated 36% over the five years.

FINSUM : We are not so keen on this argument, and favor the idea that the tax cuts will create less corporate issuance, and thus high prices as demand squeezes supply.

  • Trump
  • bonds
  • credit
  • bear market


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