It would seem to depend on who you speak to. Some economists talk of a huge bond bubble, which will lead to a big unwind. Others, that inflation is key to interest rates rises. If June was anything to go by, then how many pension funds will still be sitting in bonds by September may telling. Tapering may be fine in theory, but the herd mentality seems to dictate what happens in practice. I think inventory will still dictate home prices as much as interest rates, and that the alignment of those two planets is what will drive home prices down. In the mean time, I’d be more worried about fixed income investments.
