Analyzing Bond Market Dynamics

Is what would you look for to say, "The time is here.

The bond-tempered tantrum is, is finally occurring"?

Well, it could be seen in either the bond

market, the, the market action.

It's by long rates rising relative to short rates.

In other words, they're trying to hold the short rates

down, and the long rates

are rising nonetheless.

And we are seeing some of that.

And you're, then you're seeing the weakening then of

the dollar

and, and then you're seeing movements such as

in gold and

other assets. And when you see that rise in rates,

then that starts to affect the stock market.

Because what's happened now is that with bonds going

down and stocks going up, the

prospective returns now of, uh,

stocks are now down low relative

to the prospective returns of bonds.

And so that upward pressure then starts to translate

into a stock market pressure. That is the classic

dynamic, and something that the Federal Reserve then, or

any central bank, is in a position of not easily being able

to manage, because it becomes more of a

stagflationary

environment. So the stagflation that we're seeing right now, the Fed

wrestles-

Mm-hmm

... with the question. If it's tightening or if it's easing,

that also has ... In a economy where there is such a

wealth d- disparity, but also think about the

implications of whether you own stocks or whether you don't own stocks,

and that difference.

That impact is, is very different.

That has huge political implications.