End of an era for this long-term bond bull as inflation takes hold and yields trend higher
For more than three decades, Hoisington Investment Management and its chief economist Lacy Hunt have been bullish on bonds. But now their opinion has changed.
Hoisington Investment Management, a firm that has been a stalwart advocate for long-term bonds for over 30 years, has shifted its stance, citing the emergence of inflation and a trend of higher yields. This change in opinion from a respected player in the industry is significant, as it marks a turning point in the long-standing bond bull market. The firm's chief economist, Lacy Hunt, has been a prominent voice in the bond market, and his views have been closely followed by investors.
The shift in Hoisington's stance reflects a broader change in market sentiment, as inflation concerns have grown and yields have begun to rise. For much of the past three decades, low inflation and low interest rates have made bonds an attractive investment, as they offered a relatively safe-haven asset with a positive yield. However, with inflation now trending higher and the global economy recovering from the pandemic, investors are reassessing their views on bonds and yields.
As the bond market adjusts to a new reality of higher yields and inflation, investors will be watching to see how other market participants respond. Will other bond bulls follow Hoisington's lead, or will they stick to their guns? What will be the impact on bond prices and yields as the market adjusts to this new paradigm? Investors should keep a close eye on economic data, particularly inflation indicators, as well as central bank actions, to gauge the trajectory of the bond market in the months ahead.
Originally reported by marketwatch.com. BondNews adds analysis for finance & markets readers.