Bond market concerns are overly bearish, says L&G

Economic growth concerns in bond markets that have led to a recent rally in US Treasury bonds are ov...

Economic growth concerns in bond markets that have led to a recent rally in US Treasury bonds are overly bearish, Legal & General believes. Since June this year, yields on T-bonds have fallen from just below 5% per year to just over 4% and T-bond prices have risen as a result. This is because investors believe the rising price of oil and other commodities will push up costs for producers, and profits, so employment growth and inflation will be lower. This would mean lower dividends and equity values, making government bonds such as T-bonds a safer investment. While lower yields on US b...