An interesting article hit my inbox this morning from WSJ MarketWatch which was titled “100% Of Economists Think Yields Will Rise Within 6 Months.” From the article:
“Economists are unwavering in their assessment of where yields are headed in the next half year.
Jim Bianco, of Bianco Research, points out in a market comment Tuesday that a survey of 67 economists this month shows every single one of them expects the 10-year Treasury yield to rise in the next six months.”
This is very striking from the standpoint that a separate poll of economists showed that there were none, zero, nada expecting an economic contraction either.
With literally 100% of all surveyed economists bullish on the economy it suggests that there is nothing but clear sailing ahead for investors. Of course, it is also important to remember that it was this same group of “economists” that have been predicting the return of economic growth and higher interest rates for the last three years, as well. As we enter into the sixth year of the current economic expansion the unanimous “bullish bias” is indeed fascinating.
As I read the article, I was nearly deafened by the voice in my head screaming Bob Farrell’s Rule #9 which simply states:
“When all the experts and forecasts agree – something else is going to happen.”
Almost one year ago, after interest rates initially spiked from historic lows, I begin writing then that the bond “bull” market was not yet over despite the litany of articles and punditry claiming otherwise. Furthermore, I stated that interest rates would be lower in the future than they were at that time because the three primary ingredients needed for higher rates which were not present: rising inflation, increased wage growth and economic acceleration.
As I stated then in “Reiterating Bond Buy:”
“However, there are three reasons to add bonds to portfolios currently:
