Bloomberg/Michael Mackenzie and Liz McCormick/6-25-2022
“Bond investors are torn about whether the recent pullback in yields — fueled by increasing fear of recession — marks an end to the worst Treasury bear market of the modern era, or just a pause.… The task has been rendered all the more complicated by Powell’s focus on tightening monetary policy until “compelling evidence” emerges of a pullback in inflation.”
USAGOLD note: The word “investors” used in this context looks like a misnomer. It should be replaced with the word “speculator.” A bond investor would hold the instrument to maturity, satisfied with the yield being paid. A speculator is betting the bond market will go up or down. Under those circumstances, the question of recession or inflation comes into play. These days with stagflation – a combination of the two – the most likely outcome betting on one or the other might be less than productive. Please see the ‘USAGOLD note’ under the post immediately below for more on the same subject.
