May 12, 2021 | By Hank Cunningham
After the pause in April, it is likely that bond yields will resume their upward trend. Bonds offer poor value at present levels, especially with rising inflation pushing real yields to even deeper negative territory. The lines are drawn between those forecasting a transitory increase in inflation and those looking ahead to accelerating inflation. With surging commodity prices, firming wages and massive monetary and fiscal stimuli, the odds favour a lasting pickup in inflation. Ultimately, the Fed will need to address its accommodative stance, and at least, move forward the timing of the first hike in the Fed Funds Rate and/or a tapering of its bond purchases. Bond yields should push to 2% and beyond.