Expert: Doug Ingram - 4/3/2010

Question
Hello:

Is it possible to have a "bear" or "bull" bond market just as is common for the stock market?  If so, is the bond market in a bear or bull market?

I thank you for your reply.

Answer
The bond market has been in a major bull market since 1980 with 10 year rates going from 15% to 2% (prices going up).
We are sideways now after reaching a peak last year at 2% (highest price - lowest yield).

If that was the low yield, we are already in a bear market (prices down - yields up).

Nevertheless, since the end of 2009, we have been in a minor bear market.

If the 10-year bond trades above 4.5% (and then 5.4%) a major bear market will be underway - meaning a return to inflation.

For now - we're moving sideways while the Fed is on hold with low interest rates.
That can't last forever, we're printing too much money (leading to inflation).