Geopolitics and Markets Review 28th November 2022:

A quiet week for geopolitics and financial markets. So I'm going to dive into an asset class that has piqued my interest.

Bonds, Bonds, Bonds

Are bonds actually starting to look like an attractive asset class? It depends on a few things. Such as which country you’re looking in. US bonds are gaining my attention. I found this on Wealthion when they had guest Michael Lebowitz in their Bonds Explained episode. I’ve always struggled to keep knowledge about the bond market in my head. I often didn’t understand it well enough. This episode helped.

Scenario Planning

There are two scenarios in which bonds could perform well:

· Inflation comes down, and so interest rate cuts begin, and bond yields drop leading to price rises.

· Inflation doesn’t come down, but something breaks. A recession would slow economic growth too much. Then interest rate cuts and quantitative easing (government buying bonds) have to restart. The government buying bonds drives up prices.