2016 is almost over here on Wall Street
here's 2017 in a minute the bond market
certainly appeared to turn in 2016 bond
yields hit a bottom and started rising
very dramatically can we be sure that
that trend will be relied on in 2017
well first of all take a look at
inflation expectations yes they
certainly seemed to turn upwards very
significantly most obviously in the
States but also in Germany in Japan if
that continues then it's difficult for
bond yields to keep that they're still
remarkably low levels second critical
dimension is the behavior of central
banks here is in what proportionate
changes the three big central banks have
made to their balance sheets over the
last decade you can see that the Federal
Reserve has now stopped trying to
administer new stimulus that's not true
of either the Bank of Japan or the ECB
the critical question is are they really
going to stop or taper off their support
for the bond markets if they don't it's
still hard even there to be that bearish
about bonds and that's the New York
minute