November 15, 2021 | By Hank Cunningham
Fixed income yields are poised to move even higher. Inflation is proving to be resilient, pushing to multi-decade highs as measured by the CPI in the U.S., and broadly higher elsewhere. The transitory view on inflation are taking a hit as price pressures spread to most sectors of the economy. In the wake of this, demands for higher wages have begun and are likely to continue.
Global growth estimates are optimistic and many developed world economies have surpassed various pre-pandemic levels.
Overall, we may be in a bear market for bonds. The move higher in short-term yields is a harbinger of the tapering about to begin. In the near term, it is likely that bond yields may make a new high for the year, passing 1.75% in the process.