Also in this playlist...
This transcript is automatically generated
Percent -- joining us now to talk about -- -- remarkable record setting performance on Wall Street.
Russell investments chief economist Michael -- -- Michael good to talk to you and you know I -- -- I'm amazed at the number of people are just sort of falling off -- To the sides.
We're talking about big sell offs are talking about we're gonna see in the bond market -- collapse.
Equities or -- I mean what is going on here.
Play in my view Lou it's it's not 1994 the bond market collapse and you thought.
The ten year treasury yield reached 8% in mention -- four.
We're not seen anything like that now I think it's more like 1984.
In the -- that.
The US economy is -- global locomotive for growth.
You see falling inflation expectations rising the real yield expectations.
And also view that the US economy is not going to be recession from those are all more like 1984 -- 1994 so the bond market is not gonna fall off the -- We're gonna see yields stabilize I think.
I never really understood why the bond market -- -- her way up to two point seven after the last nonfarm payroll employment report.
And that's sort of melted away were back Darren 2.5 eight as you said for the -- -- revealed today.
And -- And do you see what you believe that we're going to see.
Pay a significant rotation from the bond market two equities as some have forecast and suggested.
But we're seeing certainly.
Fall -- but we're not saying that money necessarily -- -- equities.
I don't think we've seen a real short term rotation.
However if you think about those -- long term outlook for bonds.
Over the last thirty years bond investors got used to the idea that they would get their their coupon return.
Plus they would get a capital gain on their bonds there was just a general downward trend -- yields over the whole period of last thirty years.
That's come to an end so bond investors -- heavy use the idea that they're gonna expect their coupon yield and not a capital gain associated with that as well so.
That that's a shift but it's not that a sudden shift right now we knew that the -- Bull market -- had lasted for thirty years of coming to an end that you would no longer have a capital gain and a reliable basis on their bonds.
Now it's a matter of whether the coupon you look -- -- to investors you know somebody forgot to tell.
-- because Bill Gross.
He apparently was unaware of that that shift -- really knew about.
In equities itself driving part of this advanced certainly.
Has been a has been the housing market.
And now we're hearing talk about -- abductions.
-- mortgage interest of being scaled back or eliminated all together.
We're hearing a number of -- -- possible obstacles to further.
-- high performance by the housing sector your thoughts.
I wouldn't hold my breath waiting for need scaling back of the mortgages are seduction.
I don't think that's going to be in the cards anytime soon I think homebuyers can go ahead and purchase with the confidence that that -- will be there for some time so.
I'm pretty bullish on the US housing market and perhaps not quite as -- to some of the blue chip paint us that I -- In terms of what the housing starts Summers will be both this year and next here -- still.
A bullish outlook on the housing market will be a key driver of US economic growth for several years to come.
I don't expect any falling out of that market at all.
-- -- thank you very much we appreciate you being with us.
Filter by section