Most market participants continue to watch in disbelief as bond yields continue to trend lower and the yield curve continues to compress in the most unexpected fashion. This pair of articles that give a good overview on the subject matter.
- What would the bursting of the bond bubble look like?
- Unstoppable $100 Trillion Bond Market Renders Models Useless
Here is the bottom line. Anyone who expects the “bond market bubble” to burst is in for quite a shock. First, there is NO bond market bubble. There is a massive stock market bubble, but the same cannot be said about the bond market. Second, as I have mentioned earlier the bond market is starting to see a severe recession ahead….hence the decline/compression.
Finally, 30-year bull markets (in bond prices) typically do not end in a simple V shape form. The bond market is going lower to set a secondary/double bottom that will coincide with a bear market of 2014-2017.
Shocking News: Is The Bond Market Bubble About To Burst? Google