Goldman Sachs Is Avoiding Credit, Sovereign Bonds

The video discusses the challenges in asset allocation following a significant decline in Treasurys and bonds. It highlights the difficulties faced by the traditional 60/40 portfolio in delivering returns and managing risk. The discussion covers the shift from a virtuous to a vicious cycle between equities and bonds due to volatility. A structural regime shift in bond markets is underway, driven by factors like deglobalization and decarbonization. The video also examines the role of bond yields in buffering recession risks and the trade-offs involved in using bonds as safe assets.

How has the relationship between equities and bonds changed in the current cycle compared to the last cycle?

What are the implications of the current bond market conditions on risk management?

What factors are contributing to the structural regime shift in the bond market?

In what ways might bond yields provide a buffer during recession risks?

What are the potential risks associated with relying on bonds for asset allocation in the current market?