Economic Kryptonite, part 2

Source: American Consequences
by Kim Iskyan

“The expectation of higher interest rates, the beginning of the end of the Fed’s pandemic bond-buying program, and the fact that it’s mathematically difficult for interest rates to go much lower all point to the ‘normalization’ of monetary policy, that it’s finally edging closer to leaving what feels like has become permanent crisis mode. And that highlights the rising possibility that the longest bull market in history may be finally drawing to a close, as interest rates rise, bond yields go up, and bond prices drop, likely more than 20%. But the reports of the death of the bond bull market, to paraphrase Mark Twain, have been greatly exaggerated. ’35-Year-Old Bond Bull Is on Its Last Legs,’ prematurely claimed the Wall Street Journal in July 2016, pointing in part to low rates (at the time, a relatively robust 0.50% to 0.75%).” (11/16/21)