BVTV: A look at the US and UK bond markets

This week on BVTV, I have a look at past US interest rate cycles. With new Fed Chair Jerome Powell now in the hot seat, bond investors are keen to understand whether he will be more hawkish than his predecessor, Janet Yellen. Turning to the UK, the market is now pricing in a high probability that the Monetary Policy Committee hikes interest rates in May, but the flattening of the gilt curve may suggest the market doesn’t entirely share the Bank of England’s optimism on the UK economy.

The value of investments will fluctuate, which will cause prices to fall as well as rise and you may not get back the original amount you invested. Past performance is not a guide to future performance.

Categorised as: BVTV

Discuss Article

  1. Saikat Chatterjee says:

    Hi, nice video. Why do you look at the spread between 30-10 year UK bonds for gauging recession risks in the UK economy and not 30-2 year bond spreads?

    Posted on: 26/03/18 | 10:49 am
    • Anthony Doyle says:

      Thank you for your comment.

      In using the 30-10 year spread, I was highlighting how flat the long end of the UK government bond yield curve is at the moment. The 30-2 year UK gilt spread is currently 86 basis points, a level not seen since October 2008. Hope this helps.

      Anthony

      Posted on: 26/03/18 | 2:43 pm

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