The bear market in bonds has arrived

The bear market in bonds has arrived
Joining Gross and Buffett, another top strategist says government bonds are too expensive. With or without the Fed, the march to higher rates has begun.
MAY 06, 2015
By  Bloomberg
A bear market in Treasuries is under way, even after a late-week rebound, according to Royal Bank of Scotland Group Plc. “What we've seen in recent weeks is not a blip, it's the beginning of higher rates,” said William O'Donnell, head of U.S. Treasury strategy at RBS Securities in Stamford, Conn. “Everything unraveled all at once. What we've had is the first of a series of bouts of bond-market vertigo.” (More: Gross says 35-year bull market coming to an end) Declines in Treasuries the past three weeks have changed the fortunes of large fund managers, and had market prognosticators working to figure out the next move. RBS's strategists said there's more pain to come. The 30-year bond yield will rise to 3.5% this year from its Friday level of 2.9%, Mr. O'Donnell said. As economic data in Europe look stronger and the Federal Reserve discusses when to raise interest rates, “the market is beginning to reassess the level of rates,” he said. (More: Forget a rate hike – Peter Schiff expects more quantitative easing from the Fed) Mr. O'Donnell joined Warren Buffett, the billionaire chairman of Berkshire Hathaway Inc. and Bill Gross, the manager of the $1.5 billion Janus Global Unconstrained Bond Fund, in a growing chorus saying that government bonds are too expensive. Fed Chair Janet Yellen said that long-term Treasuries could jump when the central bank raises interest rates.

Latest News

SEC bars ex-broker who sold clients phony private equity fund
SEC bars ex-broker who sold clients phony private equity fund

Rajesh Markan earlier this year pleaded guilty to one count of criminal fraud related to his sale of fake investments to 10 clients totaling $2.9 million.

The key to attracting and retaining the next generation of advisors? Client-focused training
The key to attracting and retaining the next generation of advisors? Client-focused training

From building trust to steering through emotions and responding to client challenges, new advisors need human skills to shape the future of the advice industry.

Chuck Roberts, ex-star at Stifel, barred from the securities industry
Chuck Roberts, ex-star at Stifel, barred from the securities industry

"The outcome is correct, but it's disappointing that FINRA had ample opportunity to investigate the merits of clients' allegations in these claims, including the testimony in the three investor arbitrations with hearings," Jeff Erez, a plaintiff's attorney representing a large portion of the Stifel clients, said.

SEC to weigh ‘innovation exception’ tied to crypto, Atkins says
SEC to weigh ‘innovation exception’ tied to crypto, Atkins says

Chair also praised the passage of stablecoin legislation this week.

Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest
Brooklyn-based Maridea snaps up former LPL affiliate to expand in the Midwest

Maridea Wealth Management's deal in Chicago, Illinois is its first after securing a strategic investment in April.

SPONSORED How advisors can build for high-net-worth complexity

Orion's Tom Wilson on delivering coordinated, high-touch service in a world where returns alone no longer set you apart.

SPONSORED RILAs bring stability, growth during volatile markets

Barely a decade old, registered index-linked annuities have quickly surged in popularity, thanks to their unique blend of protection and growth potential—an appealing option for investors looking to chart a steadier course through today's choppy market waters, says Myles Lambert, Brighthouse Financial.