DoubleLine Funds’ Jeffrey Gundlach gave his 2015 outlook for the markets Tuesday.
About in hour into his presentation, he offered this chart of government bond yields we often see.
“This might be the chart of the year,” he said.
It shows that yields on German, Japanese, and Swiss bonds are actually lower than the yield on the US Treasury note.
For years, bond-market pundits have argued that US yields are too low and that they will inevitably go up.
But as long as US yields are higher than yields in other government-bond markets, then the US bond market will continue to offer value to the global bond-market investor.
In other words, US bond yields have lower to go and prices can still go up.
This has been a theme of Gundlach’s for years.
Currently, economists forecast the yield on the 10-year Treasury note will end 2015 at 3.01%, up from 1.96% on Tuesday. That’s much higher than the 0.50% offered by German bonds, 0.26% offered by Japanese bonds, and 0.20% offered by Swiss bonds.
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