The 15+ year Treasury index is down 43% from the peak in March 2020. All previous drawdowns since the series started in 1973 did not exceed 20%, so this is big, and unprecedented. But the yield level is now relatively comfortable in absolute terms, and appears particularly attractive relative to equities.
A recession is the first thing that comes to mind. It would push growth, inflation and earnings lower, while boosting fixed income. Bond investors have a lost decade behind them, but equities and real estate (which has also risen 75% over CPI in ten years, in the US) could have a lost decade ahead.
The 15+ year Treasury index is down 43% from the peak in March 2020. All previous drawdowns since the series started in 1973 did not exceed 20%, so this is big, and unprecedented. But the yield level is now relatively comfortable in absolute terms, and appears particularly attractive relative to equities.
Relative Equity vs Bonds look pretty stretched: https://pbs.twimg.com/media/F7GTtvlW8AAKerv?format=jpg&name=medium
A recession is the first thing that comes to mind. It would push growth, inflation and earnings lower, while boosting fixed income. Bond investors have a lost decade behind them, but equities and real estate (which has also risen 75% over CPI in ten years, in the US) could have a lost decade ahead.