23 Feb The bond crash of 2021? Seven things for investors to consider
Key Points:
- Higher bond yields are normal in economic recovery and should not be a major problem for shares if they are matched by rising earnings. But too rapid a rise in bond yields risks driving a deeper correction in shares.
- Central banks want higher inflation but will look through any short-term spike.
- The 40-year downtrend in inflation and bond yields is likely over. But the fundamental backdrop of improving growth, rising profits and still low rates supports the case for solid 6-12 month returns from shares.
