Taps Coogan – October 20th, 2021

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As the following chart from Tiho Brkan details, investors are the most underweight bonds they’ve been since at least 2001, taking out lows seen just before several recent bond market rallies, including just prior to the Global Financial Crisis (2007).

It’s probably a good time to freshen up on Dr. Lacy Hunt’s bond thesis just in case the consensus narrative, which is quickly pivoting from ‘inflation is transitory’ to ‘inflation is here to stay,’ is just as wrong now as it was a year ago.

After all, bond investor sentiment is, if anything, a counter indicator of where bonds are headed.

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