Bond Market Momentum Firmly Bullish With All Eyes on Powell's Jackson Hole Address

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Bonds Analysis by James Picerno covering: iShares iBoxx $ Investment Grade Corporate Bond ETF, SPDR® Bloomberg High Yield Bond ETF, Vanguard Total Bond Market Index Fund ETF Shares, iShares 7-10 Year Treasury Bond ETF. Read James Picerno's latest article on Investing.

this Friday . The central banker is expected to drop clues about the outlook for monetary policy for the rest of the year — clues that are forecast to favor higher bond prices and lower yields.

Fast forward to current conditions and the rally is in full bloom. For a quick recap, let’s start with a broad measure of investment-grade bonds via Vanguard Total Bond Market . The fund has been in a solid uptrend since May and the persistence of the 50-day moving average holding well above its 200-day counterpart suggests that the trend remains resolutely positive.

“I don’t think that the Fed has to fear inflation,” says Tom Porcelli, US chief economist at PGIM Fixed Income. “At this point, it’s right that the Fed is now more focused on labor versus inflation. Their policy is calibrated for inflation that is much higher than this.”Risk Disclosure: Trading in financial instruments and/or cryptocurrencies involves high risks including the risk of losing some, or all, of your investment amount, and may not be suitable for all investors.

 

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