July 1, 2021
According to a poll of leading bond strategists surveyed by Reuters, there is likely to be a correction in global bond markets in the next three months. Strategists believe this because central banks across the world are all looking for the exits from their stimulus programs. The head of strategy at Rabobank commented that “The message from Powell is: We will look through it (inflation). We're not going to jump to conclusions and that creates some calm. But you just need a couple of big surprises (in data) and things are again open to correction.” 59% of those strategists surveyed said they saw a “significant” sell-off in global bond markets coming in the next three months.
FINSUM + Magnifi: This all depends on timing and signaling. If the Fed makes an inadvertently hawkish statement, you could easily see a 2013-style Taper Tantrum. But if the Fed (and other critical central banks) uses careful wording and guidance, the whole transition could be smooth.
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