One CIO expects bond yields to rise once more, saying a number of factors will lead to another bond conflagration.
Scott Peng, the founder and chief investment officer of New York investment manager Advocate Capital Management, made at the beginning of the year what seemed to be a prescient call — that the yield on the 10-year Treasury would spike.
The emergence of the delta variant of coronavirus, and hedge funds reducing their short positions, also were factors behind the surge in bonds. While the start of a new trend is exciting, it typically ends after too many people pile onto the same side of the boat. “After a correction to reset the supply-demand balance, the long-term trend reemerges. We might be at that critical juncture between the correction and the reassertion of the long-term trend in the rising rate saga,” he said.The stunning fall of Afghanistan to the Taliban — as well as the political fallout for the Biden administration — dominated conversation.
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