Crux's Ward on 'disconnect' between debt and demographics

Concern for bond markets

To varying degrees, equity markets have embraced the 'reflation trade' in the run-up to, and more obviously subsequent to, Donald Trump's election as US President.

The fact the reaction of financial markets to that unexpected and supposedly unwelcome event has been so positive, underlines the dangers of macro/political investing.  Disconcertingly, bond markets seem rather less certain of the reflation narrative, placing more emphasis on the twin evils of excessive debt levels and poor demographics than on White House tweets.  That disconnect poses obvious risks; reconciliation thereof will be uncomfortable for one side or the other.  There are certainly some signs that the US Fed is becoming more concerned by the risk of finding itself 'behin...