The bond market is currently telling you the economy is headed for recession or extremely weak growth. The stock market is telling you things are going to get better. One of them is wrong and history says it’s probably the stock market that is wrong.
Personally I think interest rates are going to remain low for some time but I don’t know that we get back to sub 3.5 on a 30 year fixed mortgage. I suppose we could get the ugly situation where everything sells off when the next bubble pops rather than having a good hiding spot. I.e. the great deleveraging that hasn’t happened yet. If it does than none of the assets priced with leverage are going to be good and the only safe spot will be cash. Interest rates will rise while deflation is present. The fed will do everything it can to prevent that from happening but I’m not sure it has the power to do so.
