Stock markets and economists are busily shrugging off an unexpectedly harsh revision to U.S. economic growth figures for the first quarter. But the general don’t-worry-be-happy vibe has so far left out one notable observer: the bond market.
The story told by bonds – especially government bonds in the developed world – is rather downcast. The yield on the Bloomberg Global Developed Sovereign Bond Index hit its lowest point in a year on Wednesday. That suggests investors are coming around to the notion that interest rates will remain lower for longer than they thought a few months back, and so are increasingly willing to load up on bonds, even at their current miserly yields.