Is There A Bubble In The Bond Market?

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Is There A Bubble In The Bond Market?

Conditions in the bond market don’t match the textbook definition of a bubble, but aggressive bond investors are positioning themselves to lose stunning amounts of money. Interest rates are currently near all-time lows, and there’s a heated debate as to why. Optimists will tell you that rates are low because global governments and central banks are stimulating the world economy. Pessimists will tell you that rates are low because we are on the verge of something terrible. A recession, a depression – call it what you will, but it will be so bad that prescient investors are content to lock in today’s rates for the long term.

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