David Tepper calls the end of the bond market rally.
David Tepper says the bond rally is over.
Speaking in an interview with Bloomberg's Stephanie Ruhle, Tepper said, "It's the beginning of the end of the bond market rally. We are done."
Tepper, the founder of $20 billion hedge fund Appaloosa Management, made these comments following the ECB's interest rate cuts — and asset purchase program — announced earlier this morning.
After starting 2014 at around 3%, the yield on the ten-year fell to less than 2.4% during the summer and is currently trading near 2.45%.
Bonds in the Eurozone have also been rallying this summer, with the yield on 10-year German bunds falling below 1%.
It's not clear if Tepper's call is for the end of this year's bond rally, or for a meaningful break from the nearly thirty-year bull market that investors have enjoyed since the U.S. 10-year topped out above 15% in the early 1980s.
Tepper's comments also come after Jeff Gundlach of DoubleLine Funds, one of the few people on Wall Street who predicted this year's rally in bonds, told BI in early August that he expects the 10-year yield to remain between 2.2%-2.8%, with the risk that yields fall below 2.2%.
Here's the amazing run enjoyed in the U.S. 10-year over the last forty years.
More From Business Insider
- We've Hit The Fifth Year Of 'Income Famine' — Here's Why Investors Should Be Worried
- A Stunning New Map Reveals For The First Time Where Our Galaxy Fits Into The Universe
- What I Learned By Waking Up At 4:30 A.M. For 21 Days
- If You Can Solve This Math Problem You'll Get A $1 Million Prize — And Change Internet Security As We Know It
- 32 Wonderful Yearbook Photos Of Wall Street's Biggest Players