Right around the start of November, two words suddenly disappeared from the chatter in the bond market: debt supply.
Convinced a recession in the US was near, some of the world’s most prominent money managers loaded up on government bonds this year in a bold bet that would atone for the punishing losses suffered in 2022.
The surge in U.S. inflation is sending some of the biggest names on Wall Street into rethink mode, forcing them to recalibrate strategies that depended on bonds as a shock absorber against equity downturns.
The Federal Reserve may be fretting over the speculative euphoria in crypto, SPACs and meme stocks, but plenty on Wall Street see bubble risks growing across all the systemically important assets.