igggy

Bond Expert: Thursday Wrap

I don't understand why the corporate bond market is so stable when the treasuries are falling apart. It's not like corporate bonds can avoid the carnage of higher interest rates. What am I missing?

I agree with Macro_Man, the moment the stock market drops, we'll have a huge rally in treasuries. I wouldn't be surprised if we revisit 3% yields on the long bond. But what do I know? I started shorting the long bond last October which was pretty dumb in hindsight.

Treasury Yields Will Continue to Rise

> Yields fell at the end of last year because the market came to believe that deflation and depression were highly likely to engulf the U.S. and global economies. Now we know that those dangers were vastly over-estimated.

Hm, how do we know now that those dangers are not under-estimated? There's been too much talk about a weak US dollar and inflation lately. I think it's a fad and the dollar will get stronger again and we might see sub 3% yields on the 30-year bond by the end of the year. Think Japan. Nobody does for some reason.