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Wednesday, September 28, 2011

Rosenberg Daily - Bonds

As for bonds, we have the high and rising prospect of a recession and yields, no matter how low they are, typically bottom a year into the recovery! They don’t bottom ahead of the downturn. And inflation expectations are receding as well, with the 30-year TIPS spreads collapsing nearly a full percentage point in just the past month to south of 200 basis points (and to a mere 140bps for 5-year TIPS breakeven levels). The Conference Board’s consumer inflation expectations measure has also fallen to its lowest level since February (more on this below).

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