There’s a limit to how silly professional investors can look, and having lost huge amounts of money on their bond portfolios, they are hesitant to buy more.
Asset managers and bankers know that their careers will probably survive one major investment blunder. But it’s curtains if they make the same mistake a second time.sidelines of the bond market
In particular, bond prices were supposed to rebound, after the US bond market suffered its worst year on record in 2022, with Bloomberg’s US Aggregate Index recording a 13 per cent slump. Instead, the index is down more than 3 per cent so far this year on a total return basis.Last week alone, the US 10-year bond yield jumped 30 basis points to 4.93 per cent, after
And investors could also demand higher yields if they expect the growing US budget deficit means the US government will be forced to issue more bonds, shifting the balance between supply and demand. According to the Fed’s Survey of Consumer Finances, American families enjoyed the biggest jump in their wealth on record between 2019 and 2022, as they benefited from soaring equity markets and rising house prices, and massive government relief packages.
The problem for many asset managers is that they became overly accustomed to minimal bond yields since the 2007-08 financial crisis ushered in more than a decade of ultra-low interest rates. Now, logic says that if investment managers and bankers were eagerly buying at a 4 per cent yield, they should be buying even more vigorously at 4.93 per cent.
United Kingdom Latest News, United Kingdom Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Why this car breaks all the rulesA high-speed test on track reveals the true colours of Aston Martin’s DBX.
Read more »
Why top AFL draft prospect put a media ban on himselfDaniel Curtin might be the most talked-about AFL prospect this side of Harley Reid in the talented 2023 crop – and he admits it is nigh on impossible to ignore the hype.
Read more »
Why there will never be a Canva or Atlassian from Aussie AI“I’m seeing way more exciting stuff in the US,” says Zeb Rice, a venture capital investor targeting AI start-ups in Australia and the US.
Read more »
Spooky season: Why Sydney is embracing a month-long HalloweenThe decorations are already up, and Halloween is in full swing across Sydney.
Read more »
Why top AFL draft prospect put a media ban on himselfDaniel Curtin might be the most talked-about AFL prospect this side of Harley Reid in the talented 2023 crop – and he admits it is nigh on impossible to ignore the hype.
Read more »
Why adman David Droga bought ‘the best piece of land in Australia’New York-based advertising executive David Droga on his enduring obsession with Tamarama’s Lang Syne, and his plans for the $45m beachside block.
Read more »