It is SLL’s firmly held conviction that bonds are currently the worst investment of a very bad lot. The bond market will have many rough days during what SLL predicts will be a multi-year bear. From Wolf Richter at wolfstreet.com:
Fed’s coming tightening cycle sinks in, amid still brutally negative “real” yields, as bonds’ purchasing power gets eaten up by inflation.
Bond fireworks lit up the sky on Friday, following the release of the jobs report that dashed fervent hopes in the bond market that crummy employment numbers would cause the Fed to back off its rate-hike tango before it even gets started. Over the past few days, reports were bandied about that explained why the jobs number would be anything from dismally low to hugely negative. But the numbers were far better than expected – they were actually pretty good for all kinds of reasons – and instantly yields spiked and mortgage rates shot higher.
The two-year Treasury yield spiked 13 basis points to 1.32%, the biggest one-day jump since the turmoil on March 10, 2020, and the highest since February 21, 2020:
The one-year yield spiked 11 basis points to 0.89%. This is up from near-0% in September last year. Over those five months, the world has changed.
