Bond markets are pricing in bad news

Fund manager's comment

With increasing speculation in the press and the investor community that bonds are staring a 30-year...

With increasing speculation in the press and the investor community that bonds are staring a 30-year bear market in the face, I thought I would try to provide a calmer view. The current economic climate is very mild. It may not seem that way, with daily stories of house price bubbles, commodity spikes, China overheating and consumer debt at unsustainable rates. However, growth is running just above trend at an annualised rate of 3% in the first quarter, inflation is mild with the CPI measure standing at 1.5% year on year in May with the older RPIx at 2.3%, and base rates of 4.5% are not...