With President-elect Donald Trump's presidency looming, investors are trying to decipher what the “new normal” will look like.
For bond traders, so far that’s meant selling in anticipation of higher rates and inflation, which proved to be a good bet, and their moves helped push the yield on 10-year Treasuries over 2.5%, Bloomberg reports. DoubleLine Capital CEO Jeffrey Gundlach predicts Treasury yields could hit 6% at the end of Trump’s term, and warns higher borrowing costs would hurt stocks and real estate.
Other experts think investors should rethink their assumptions and not expect the new normal to last. But for the time being, bond investors will be happy to earn more interest as bond yields continue to rise. [Bloomberg]
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