Is the Secular Bull Market Over for Bonds?
Opinions on the bond market continue to grow louder as several market prognosticators claim that the multi-decade bull market for bonds is over due to some key technical indications being exceeded. I am not so quick to call the end for the bond bull market, but I continue to expect yields to rise over the next several months as the economy continues to strengthen.
Last week, U.S. interest rates reached their highest levels in quite a few years. The selloff in bonds caught market participants off guard as the week didn’t see any significant new economic information.
This week will be important, as several Fed speakers are scheduled to give updates on the economy and the minutes from the May 1 and 2 FOMC meeting will be released on Wednesday. I will be looking to see if the Fed continues to take a measured tone to rate increases; however, I expect it will be cautious not to cause an inverted yield curve by raising short term rates too quickly.
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