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 charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees
SEC charges Chicago-based investment adviser with overbilling clients more than $2.5M in fees

Eliseo Prisno, a former Merrill advisor, allegedly collected unapproved fees from Filipino clients by secretly accessing their accounts at two separate brokerages.

Apella Wealth comes to Washington with Independence Wealth Advisors
Apella Wealth comes to Washington with Independence Wealth Advisors

The Harford, Connecticut-based RIA is expanding into a new market in the mid-Atlantic region while crossing another billion-dollar milestone.

Citi's Sieg sees rich clients pivoting from US to UK
Citi's Sieg sees rich clients pivoting from US to UK

The Wall Street giant's global wealth head says affluent clients are shifting away from America amid growing fallout from President Donald Trump's hardline politics.

US employment report reactions: Overall better than expected, but concerns with underlying data
US employment report reactions: Overall better than expected, but concerns with underlying data

Chief economists, advisors, and chief investment officers share their reactions to the June US employment report.

Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading
Creative Planning's Peter Mallouk slams 'offensive' congressional stock trading

"This shouldn’t be hard to ban, but neither party will do it. So offensive to the people they serve," RIA titan Peter Mallouk said in a post that referenced Nancy Pelosi's reported stock gains.

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.