Bond-pricing Compromised by Central Banks: JPM's Bilton

The video discusses the current state of the bond market, focusing on whether the pain trade involves higher or lower yields. It explains that bonds are not highly lucrative as an income source, leading investors to explore other asset markets. However, bonds remain essential for hedging liabilities, ensuring demand at various yield levels. The persistence of negative real yields in the eurozone is attributed to mechanical portfolio construction needs. The video also highlights how central bank activities have compromised the bond market's pricing mechanism, yet demand persists due to liability management and rebalancing needs.

In what ways do bonds serve as a hedge for liabilities?

What are the implications of negative real yields in the eurozone?