Goldman Says Bond Market Doesn't React as It Used to in Risk-Off

The video discusses the current state of the bond market, highlighting its reduced reactivity to risk compared to historical events like the global financial crisis. It examines the potential impact of inflation and Fed rate cuts on the market, emphasizing the importance of considering inflation risks, especially from tariffs and oil prices. The discussion also touches on the strategic allocation of cash as a protective measure in a flat yield curve environment.

How has the bond market's reaction to risk changed compared to historical events like the global financial crisis?

• It reacts unpredictably.

• It reacts more strongly now.

• It reacts less strongly now.

• It has not changed.

What is one reason for considering cash as a protective measure in the current market?

• Cash offers higher returns than bonds.

• Cash is more volatile than bonds.

• Cash is not affected by inflation.

• Cash is less reactive to market changes.

What is a significant driver of break-even inflation according to the discussion?

• Interest rates

• Oil prices

• Stock market performance

• Government spending

How do recent tariffs potentially impact inflation?

• They stabilize inflation by balancing supply and demand.

• They have no impact on inflation.

• They decrease inflation by reducing demand.

• They increase inflation by affecting consumer goods.

What is the Fed's primary concern regarding inflation?

• Core inflation

• Oil price fluctuations

• Stock market volatility

• Tariff impacts