Worst inflation in decades hammers fixed income markets

Bloomberg/Greg Ritchie and Finbarr Flynn/3-23-2022

“The Bloomberg Global Aggregate Index, a benchmark for government and corporate debt total returns, has fallen 11% from a high in January 2021. That’s the biggest decline from a peak in data stretching back to 1990, surpassing a 10.8% drawdown during the financial crisis in 2008. It equates to a drop in the index market value of about $2.6 trillion, worse than about $2 trillion in 2008.”

USAGOLD note: Though bonds are often touted as a competitor to gold for safe-haven capital, they do not respond well to inflation. Gold, on the other hand, is widely viewed as an inflation hedge as well as a hedge, like U.S. Treasuries, against stock market uncertainty and systemic risks. Not a time, in short, to be complacent.