Bill Gross is expecting low growth and low inflation in the “new normal” environment. For a contrasting viewpoint, Vivesh Kumar discusses how bond owners could get whacked if growth turns out to be stronger than expected. The ICI data is still showing big flows into bonds, so bond buyers are implicitly endorsing the low growth, low inflation scenario.
We’ll have to see how it plays out, but it seems apparent that not even safe investments may be safe.
