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You won’t hear me talking about bonds going into a bull market anymore. The chart is simply too broken, and this actually makes a certain amount of sense, because inflation and higher interest rates are indeed on the way, and that doesn’t align with a bond bull market anyway.
As you all know, Powell made quite a scene with his 50 bps cut last month although, oddly, rates have been going UP lately, I suppose because the fact that the U.S. will be healthy, prosperous, and able to pay back its debts with interest isn’t exactly something you can put in the Bible. Ultimately, though, it does look like rates are ready to roll over if the rounded top can be completed. Here is the T-Bond:
My two unabashed bullish calls – – gold and bonds – – have been doing fine. I think precious metals are going to ease back for a while, but bonds seem well positioned to make another push higher.
My general theme is that not only are interest rates going to fall, but they’re also going to keep falling to the point where it finally dawns on us all we’re in a severe deflationary environment. All this celebration and back-slapping about interest rate cuts is going to lead up to a holy-crap moment.
Seems to me that interest rates are going to be falling for years. Sounds like good news, right? It won’t be.
