After the stellar 2010s, the bond market performance has been disappointing in the 2020s. According to technical analyst Francis Hunt, this post-2020 rout marks the end of a 40-year debt bull market.
In his view, sovereigns and large institutions are increasingly forced to preserve capital in hard assets rather than chase paper gains.
Debt Cycle Is Rolling Over
For Hunt, the global financial system has moved past the easy-money era that began in the early 1980s. Since the 2020 bond-market capitulation, he argues in a recent interview, yields have entered a structural reversal marked by "ever lower highs and ever lower lows" in debt prices and an eventual nominal devaluation of the instruments themselves.
Furthermore, the shift has, in his opinion, changed how investors should read headline gains in equities and other risk assets. What looks like growth in index levels is, in large part, the denominator effect of weakening fiat purchasing power.
