Multi-Decade Bull Market in Fixed Income Securities

December 20, 2010

As 2010 draws near its end, many analysts are proclaiming the end of a multi-decade bull market in fixed-income securities.  The power of that bull market is can be seen in the table below, which presents sequential five-year averages in 10-year sovereign debt yields for the United States, Germany, Japan, Britain and Canada.  Average yields so far in calendar 2010 are also presented as are today’s levels.  The contention that a bear market is already underway, which also is apt to be prolonged, cannot be corroborated in this table, which instead suggests that the recent advance in yields is within boundaries that can be attributable by a return to more normal economic growth prospects. Assertions of a bear market must be based upon theory that heavy deficit spending will inevitably drive up inflation, real interest rates and long-term bond yields. 

10-Year U.S. Germany Japan U.K. Canada
1990-94 7.67% 7.62% 5.44% 9.23% 8.28%
1995-99 6.04% 5.55% 2.29% 6.69% 6.47%
2000-04 4.77% 4.60% 1.38% 4.87% 5.23%
2005-09 4.12% 3.73% 1.53% 4.40% 3.88%
2010 3.19% 2.77% 1.18% 3.52% 3.23%
12/20/10 3.34% 2.97% 1.19% 3.48% 3.17%

period average rates

Copyright Larry Greenberg 2010.  All rights reserved.  No secondary distribution without express permission.

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