Bonds are supposed to perform well as the safe haven asset when stocks fall, reducing the net impact to the portfolio when equities decline.
But not this year!
Bonds have actually crashed on the long end, down even more than stocks, as stocks entered a bear market.
The bond crash is a market statement rebuking the spending those bonds have represented: Not enough return for the risk.
So far the spendthrift Congress remains tone-deaf, leaving it to the Fed to raise interest rates . . . ever so feebly.
No one in his right mind believes raising interest rates 300 basis points is going to have much impact on inflation raging at 800 basis points.
