Yields will rise, but by how much?

London

THE sharp sell-off in bonds since the election of Donald Trump as US president might mean the end of a 30-year bull market. But the situation might not get out of hand yet, said senior fund managers from Schroders.

Mr Trump might not get to implement his inflation-boosting government spending policies in their entirety, and other major developed economies are still easing, they said.

US 10-year Treasury yields might have spiked from 1.8 per cent to more than 2.2 per cent in a matter of days, but are unlikely to cross 3 per cent in the next year or two, the fund managers said.

The prospect of heavy government spending in the US is "not a slam dunk", said James Barrineau, Schroders co-head of emerging market debt. "No matter what Mr Trump says…