Lighthouse Canton says bond rout reflects debt-deficit strain, not just inflation
TLT•Higher yields seen as a headwind for gold and growth sectors
Higher yields are seen as a near-term headwind for gold, with prices down 7% over the last 8 trading sessions.
Rising yields are also expected to weigh on growth sectors tied to AI capex, with quality credit favored over yield.
TIPS are viewed as beneficiaries of inflation risk, while industrial commodities are supported by stronger growth signals and geopolitics.
Bond rout driven by debt-deficit strain and inflation pressure
Lighthouse Canton flagged a universal bond rout across the US, Europe and the UK, driven by inflation pressure and a worsening debt-deficit trap.
Central banks face limited options, with political resistance to austerity raising the risk of higher inflation as an exit strategy.
