BTIM - Bond bear market fears massively overblown

“The worries about a bond bear market are massively overblown” that was the message at the recent BTIM investment forum from Vimal Gor, Head of Income & Fixed Interest. Gor believes global bond yields will stay low and global interest rates will not rise materially over the medium term. Using the simple chart below and Japan as an example Gor explained high global debt levels will result in low rates for the entire world because if the market can’t handle interest rate increases authorities will do anything they can to keep interest rates down. In supporting this view Gor highlighted that the world has not deleveraged and central banks and authorities are encouraging more leverage to support growth. The result is a world in which global growth is highly interest rate sensitive.