3 Month Treasury Bill Secondary Market Rate FRED St Louis Fed

For thirty-five years the market has been selecting for optimistic and enthusiastic bond bulls.

If you were an optimistic bond trader for whatever reason–sensical or nonsensical–you got rich. Your clients got rich. And you got more money to manage. If you were a pessimistic bond trader, again for any reason–nonsensical or sensical–you underperformed, lost your job, and had to move into another part of the business.

Thus we have selected for bond traders with a strong bull bias.

And by now our bond traders are, indeed those who have a strong bull bias–or is it those who chase the thirty-five year trend? How will they react in the future in the Age of Trump and BREXIT? Deficits should push bond prices down. But policy chaos should discourage investment and push bond prices up…

For the fourth five-year period in a row, I am going to say that the bull market in bonds is over. But I said this in 2012, 2007, and 2002 as well…

But now I am convinced I am right!