Seduced by low inflation
Global bond yields continue to fall
One of the biggest surprises in markets in 2014 has been the fall in global bond yields.
As the US Federal Reserve (the US Fed) struggles to gauge pressures in the US labour market, attention has turned elsewhere. With US inflation still near post GFC lows, the market has become seduced by the idea that US interest rates will stay lower for longer.
At the beginning of the year, the US 10 year yield was at 3% and most economists picked yields to rise further towards 3.50% by the end of 2014.
With US the 10 year yield back below 2.50%, many investors are asking why?
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