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James Grant, Founder and Editor of Grant’s Interest Rate Observer, joins us to discuss the history of bond market cycles and why the dramatic rise in interest rates that began in March of last year might have ushered in a prolonged bear market in bonds.
Grant argues that bond yields have trended in generation-length periods, with each cycle lasting at least 20 years. He believes that the bull market in bonds that began in the early 1980s has now come to an end, and that we are now embarking on a long-term period of rising interest rates.
Grant’s perspective is important because he has been warning of a bond bear market for many years. He has argued that the central banks’ aggressive monetary stimulus policies have created a bubble in the bond market and that this bubble is now bursting.
WEALTHTRACK Episode #2020 broadcast on November 10, 2023
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JAMES GRANT
- Founder & Editor, Grant’s Interest Rate Observer
- Award-Winning Financial Journalist & Historian
ACTION POINT
TAKE ADVANTAGE OF THE INTEREST-ON-INTEREST
- Interest-on-interest: returns from reinvesting semiannual coupon income from bonds
- Bonds now paying decent interest rates.
- The power of reinvesting them and compounding their returns adds up.
BOOKSHELF
ONE INVESTMENT
INTEREST OPPORTUNITY
- Compound higher interest rate payments
- Reinvest interest-on-interest
- Higher rates mean higher returns for savers.
FROM THE ARCHIVES
James Grant from the WEALTHTRACK Archives…
WEB EXTRA
DINNER CONVERSATION
Some 40 years ago, Grant’s Interest Rate Observer was created over dinner at the baronial Oak Room at New York’s Plaza Hotel.