Is the 40-year era of falling bond yields and low inflation coming to an end? That is the question investors have been asking themselves for months, and now that October’s CPI reading hit its highest level since 1991, it is a query that can no longer be avoided.

Eric Basmajian of EPB Macro Research is confident that all this anxiety about inflation is unnecessary. On today’s episode of “Forward Guidance“, Basmajian tells me why he thinks the rate of inflation will soon relent, and why he thinks the bull market in bonds is nowhere close to over. 

Pointing to the fall in economic growth rates as measured by industrial production, hirings, and real rates of consumption and income, Basmajian argues that an overweight allocation to Treasury bonds will protect investors from a slowdown in growth, as can be seen by the rolling over of coincident factors such as industrial production, hirings, and real rates of consumption and income. 

Basmajian explores particularly volatile parts of the Consumer Price Index like durable goods and rent, and he explains his long-term view that aging populations will ensure low bond yields in the United States just as they did in Europe and Japan.

Check out what they had to say in the video below. 👇

  • Blockworks
    Video Journalist
    Jack Farley is a New York-based video journalist covering traditional finance markets as the host of Blockworks macro podcast, "Forward Guidance." He previously worked on Bloomberg, Dealbreaker, and Real Vision, where he hosted over 100 long-form interviews with investors, analysts, and financial professionals. He graduated from Brown University with a degree in Economics.