Saturday, January 17, 2015

The Bond Market Is Warning of Huge Trouble Ahead

Something odd is happening in the government bond market: Interest rates are pricing in a debt-deflation cataclysm.
How else can you explain the fact that the yield on the U.S. 30-year bond hit a record low of 2.4 percent on Wednesday? Or that Japanese and German 10-year yields are plumbing record lows? Or that five-year yields of bonds issued by Eurozone safe havens Finland, Germany and Switzerland are in outright negative territory?
Something is very wrong here.

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