The material on this site is for financial institutions, professional investors and their professional advisers. It is for information only. Please read our Terms & Conditions, Privacy Policy and Cookies before using this site.

All material subject to strictly enforced copyright laws. © 2020 Euromoney, a part of the Euromoney Institutional Investor PLC.

Bond Outlook June 16 2010

Recession to the left and stagflation to the right. Good luck to government on that tightrope! Be grateful for a moderate calm in Europe with the creation of the EFSF.

Bond Outlook [by bridport & cie, June 16th 2010]

Calm has descended on financial markets, but whether that is because of the World Cup or a reflection of a return to genuine stability is unclear. What is now clear, however, is that our description of the recession as “L-shaped”, or to use John Mauldin’s phrase, resulting in a “Muddle-through Economy”, is widely accepted as a fair description of the current economic state of affairs. Bernanke himself says as much but in that special banker’s language which softens the impact of an otherwise strong statement. He talks of a structural budget gap on an unsustainable path. Thus the current calm, welcome though it is, cannot last very long.


Governments and central banks continue to walk a tightrope between inflation (actually “stagflation” as it is “cost-push” rather than “demand-pull”) and deflation.

Take out a complimentary trial

Take out a 7 day trial to gain unlimited access to and analysis and receive expertly-curated updates direct to your inbox.


Already a user?

Login now


We use cookies to provide a personalized site experience.
By continuing to use & browse the site you agree to our Privacy Policy.
I agree