bond investor

It's October - Should We Be Buying?

Alan, very cogent analysis, as I'd expect from a fellow CFA charterholder. You lay out your reasons for bond bullishness, but don't cover the scenario in which commodities would do well. Since you like bonds if the Fed doesn't cut "too much," I'm guessing that you'd prefer commodities if they cut "too much" and take us down a stagflationary road instead of a recessionary/slow-grow... inflation or even deflation road.

Rather than looking at the Fed, I would look at the Asian and Middle Eastern central banks and sovereign wealth funds, since they own and buy far more debt than the Fed. They'll tolerate currency declines in their U.S. holdings only for so long.... perhaps until just after the Beijing Olympics. At that point, look for weak U.S. demand to be exported to the rest of the world.