Is 2004's bond performance sustainable?

Fund manager's comment

Bond markets performed surprisingly well in 2004. Sovereign debt yields in all but the very shortest...

Bond markets performed surprisingly well in 2004. Sovereign debt yields in all but the very shortest maturities ended the year lower than where they started. This occurred in spite of robust global economic growth - the strongest in nearly three decades according to the IMF - and a steady rise in interest rates from the US Federal Reserve (Fed). Countering these factors, Asian central banks were active buyers of US Treasury bonds as a by-product of their currency interventions, which, when combined with low corporate bond issuance, helped keep yields below levels that might otherwise be t...