Investors are more or less trained to think about assets in stock-market terms. That is, a correction is a 10% drop from its peak, and a bear market is 20% drop, etc.
But not all assets are equal. In a market as volatile as, say, bitcoin BTCUSD , a 20% drop isn’t as big a deal. Conversely, for an asset as stable as bonds, a smaller drop carries more impact. Roberts argues the U.S. economy is more leveraged than ever, with the average consumer needing $6,400 a year in debt to maintain the current standard of living. “Such is why, with the heavy requirement of cheap debt to support the standard of living, sharp rate increases have an almost immediate impact on economic activity,” he says.
“While buying bonds today may still have some ‘pain’ in them, we are likely closer to a significant buying opportunity than not,” he says. “More important, if we are correct, the coming bull market in bonds will likely outperform stocks and inflation-related trades over the next 12-months.” Wednesday’s slate of earnings includes Boeing BA , T Mobile US TMUS , and after the close, Facebook owner Meta Platforms FB and Ford Motor Co. F
If you're wondering why the bond market crashed - here's a simple primer in plain English!
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