Summary
- BND's short-term outlook is positive due to lower inflation expectations and a potential end to or reduction in QT activity.
- Key bond risks include potential oil price spikes from geopolitical tensions and rising corporate credit risk during stock market crashes.
- In the long term, BND is not ideal due to concerns about US government debt, which makes its debt unpayable without chronically elevated inflation.
- I expect a repeat of 2020-2022 when inflation declined in the short term but was eventually pushed to a new high as the Federal Reserve overstimulated.
- Speculators may take advantage of BND's current rally, but may not want to hold the ETF for too long.
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The medium and long-term bond markets have reacted well to economic data indicating a slowdown. I've covered the popular bond ETF (NASDAQ:BND) for years, with a bearish outlook from 2020 onward, as I believed excessive government
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