Schmelzing: Perfect Storm Can Quickly Turn Bond Market

The video discusses the historical trends and current dynamics of the bond market, highlighting the impressive bond rally since the 1980s and the potential risks of a 'perfect storm' involving bond yield curve steepening and monetary policy tightening. It examines historical case studies, such as the 1960s US inflation and the 2003 Japanese tapering fears, to illustrate potential market impacts. The discussion also covers the potential upsides of higher bond yields for pensions and the risks of market surprises, drawing comparisons to the 1994 bond massacre. The video concludes with considerations for equities and asset classes in light of these market dynamics.

Discuss the implications of a steepening bond yield curve as mentioned in the text.

What are the potential risks associated with the current bond market dynamics as discussed in the text?

What factors contributed to the inflation surge in the US during the 1960s according to the text?

How did the quantitative easing program in Japan influence global bond markets?

What historical event is referenced as a significant moment for bond markets in the 1990s?