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[$$] What the Bond Market Turmoil Really Means

To be sure, there have been earlier, but premature, declarations that the bond bull market had met its demise, including in Up & Down Wall Street’s online edition back in October 2012, which cited a call by Bank of America Merrill Lynch’s chief strategist Michael Hartnett. Throughout most investors’ careers, interest rates have been in a broadly declining trend, which provides a tailwind to the prices of most assets, from stocks to high-yield credit to real estate. As DoubleLine’s Jeffrey Gundlach observes in the Barron’s Roundtable, when he got into the investment business, the Treasury long bond yield hit 14%, while inflation was 4% and falling.