In the Market: US bond market signals the end of an era

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The U.S. bond market is calling a moment: the age of low interest rates and inflation that began with the 2008 financial crisis has ended. The market's view has come into sharp focus in recent days amid a dramatic run-up in 10-year Treasury yields that hit 16-year highs. Behind that move is a bet that the disinflationary forces the Federal Reserve fought with its easy money policies in the aftermath of the financial crisis have abated, according to investors and a regularly updated New York Fed model based on yields.

- The U.S. bond market is calling a moment: the age of low interest rates and inflation that began with the 2008 financial crisis has ended. What follows is unclear.

"We have moved into a new era here," said Greg Whiteley, a portfolio manager at DoubleLine. "It's not going to be a matter of struggling to get the inflation rate higher. It's going to be working to keep it down." This rise in term premium, which spent much of the last decade below zero, reflects high levels of uncertainty about economic outlook and monetary policy, investors said.

"A very deep pocketed Treasury investor is leaving the market little by little," said Emanuel Moench, one of the authors of the Fed model who is now a professor at the Frankfurt School of Finance and Management. "That should add to some uncertainty around the likely path of Treasuries.

"The problem with the neutral rate is that you don't really know what it is until you pass it," said Leslie Falconio, head of taxable fixed income strategy at UBS Global Wealth Management. ‘Quit saving your money’: Prolific investor Grant Cardone says there's only 1 thing that will bring you true wealth — and it's not your job or being cheap. Here's what it is and how to do it

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