Perspectivas
What Is The Bond Market Thinking?
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Global Multi-Asset Viewpoint
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octubre 04, 2021
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What Is The Bond Market Thinking? |
The U.S. economy created nearly 1 million jobs two months in a row in June and July of this year. Wages are growing at more than a 5% pace.1 U.S. companies posted a record 10 million job openings in the past month. Workers are so optimistic about their job prospects that they are quitting existing jobs at the highest rate ever recorded. And mobility statistics indicate that Americans are nearly 95% back to their normal routines. In the meantime, underlying inflation (excluding transitory effects) is recovering strongly: we calculate that core PCE inflation is already approaching 2.0% on a true underlying basis and is rising steadily. It is true that the delta variant of the COVID-19 virus is spreading quickly throughout the country, but trends in both the UK and the Eurozone give a strong indication that vaccines do work in curbing hospitalizations and deaths. Moreover, cases already appear to have peaked in Europe, and we expect they could turn out to have peaked in the U.S. in the first half of September.
And yet, long term U.S. bonds yields are almost halfway back to their record lows of the pandemic last year. What might explain this?
For our viewpoint please download the full report.
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Head of Global Multi-Asset Team
Global Multi-Asset Team
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Managing Director
Global Multi-Asset Team
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