Gross Says Global Bond Market Not in ‘Rout’

The video discusses the transition from a bull to a bear market in bonds, analyzing long-term interest rate trends since the 1980s. It highlights the current critical levels for interest rates and their impact on bond prices, particularly in Germany. The discussion extends to the economic implications of rising interest rates on corporate expenses and individual mortgages, emphasizing the challenges faced by lower-yielding corporations and junk bond issuers.

What historical trend in interest rates is discussed in the first section?

• Interest rates have been unpredictable since the 1980s.

• Interest rates have remained stable since the 1980s.

• Interest rates have been falling by 20 to 25 basis points a year since the 1980s.

• Interest rates have been rising since the 1980s.

What is the relationship between bond prices and yields as explained in the second section?

• Higher yields have no effect on bond prices.

• Higher yields lead to higher bond prices.

• Higher yields lead to stable bond prices.

• Higher yields lead to lower bond prices.

What is the 'teeter-totter' effect mentioned in the second section?

• A strategy for increasing bond yields.

• A method to stabilize interest rates.

• The inverse relationship between interest rates and bond prices.

• A balance between stock and bond markets.

How do rising interest rates affect corporate expenses according to the third section?

• They stabilize corporate expenses.

• They increase corporate expenses, especially for lower quality corporations.

• They have no impact on corporate expenses.

• They decrease corporate expenses.

What challenge do lower quality corporations face with rising interest rates?

• They have easier access to credit.

• They experience increased profitability.

• They face difficulties in rolling over their debt.

• They benefit from lower interest payments.