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Market Hubris And The Bond Bubble

  • Scott Carmack
  • Feb 28, 2016
  • 1 min read

The market has decided: Inflation is dead. Wages in the United States will remain stagnant for the foreseeable future. Sluggish growth will persist globally. These are the only conclusions that an objective third party can draw from the current state of the fixed income market—which has all of the tell-tale signs of a bubble: fundamentals don’t seem to matter, policies that derail the bullish treasury thesis are disregarded as mistakes, and market participants cannot remember what a bear market in treasury bonds looks like. In time, investors will look back at the current state of the U.S. treasury market and label it a bubble, but unfortunately, it will be too late.


 
 

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Holbrook Structured Income Fund

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The Fund invests in fixed income securities or derivatives, the value of your investment in the Fund will fluctuate with changes in interest rates. These risks could affect the value of a particular investment by the Fund. Investment in or exposure to high yield (lower rated) debt instruments (also known as “junk bonds”) may involve greater levels of interest rate, credit, liquidity and valuation risk than for higher rated instruments. When the Fund invests in other investment companies, including ETFs, it will bear additional expenses.

 

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