Bond bears look poised to emerge from hibernation - again
Experts cite under-pricing of inflation in US economy, waning foreign demand and Fed bid to tighten monetary stance faster
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BESIEGED Treasury bears may finally be set for a winning streak in the world's largest bond market. Strategists are citing an under-pricing of inflation in the US economy, waning foreign demand and a bid by the Federal Reserve to tighten its monetary stance at a faster pace than markets anticipate.
"The next two months will be more threatening for duration longs as data holds up well, political risk in Europe ebbs, and investors refocus on progressive central bank exits from easy money," strategists at Societe Generale SA led by Ciaran O'Hagan wrote in a note. "And therein lies the potential for a surprise to upset the 'sleeping beast', an overly complacent bond market."
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