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. Please see our Subscription Terms and Conditions.

All material subject to strictly enforced copyright laws. © 2021 Euromoney, a part of the Euromoney Institutional Investor PLC.
Capital Markets

Bond Outlook May 10th

Two Governors, each accepting unpalatable events: Bernanke that inflation will come to the USA as the USD weakens; Trichet that the EUR may get stronger than industry would like.

Bond Outlook [by bridport & cie, May 10th 2006]

As the USD continues to weaken, and its continued decline becomes accepted wisdom, let it not be forgotten that world economic rebalancing is not achievable solely through exchange rate adjustment. The other key condition for rebalancing that must eventually come about is for American households to spend no more, and preferably a little less, than they earn. G7 decisions and Fed/People’s Bank of China (PBC) collaboration can and will determine changes in exchange rates, but rebalancing the US economy internally is a quite different matter. The housing bubble appears to be deflating, but very slowly, and in the meantime the stock markets are reflecting behaviour reminiscent of 1999 – “don’t bother us with bad news, we’ve got momentum on our side”. Rising interest rates, end of the housing bubble, through-the-roof commodity prices, the “risk” that Americans might begin saving again, high stock valuations, inflation reappearing – “we do not wish to know that, thank you!”


The US Administration is not exactly known for straight talk, be that of the state of, and the risks to, the economy or the progress (or lack thereof) in Iraq.

You have reached premium content. Please log in to continue reading.

Read beyond the headlines with Euromoney

For over 50 years, our readers have looked to Euromoney to stay informed about the issues that matter in the international banking and financial markets. Find out more about our different levels of access below.


Unlimited access to and

Expert comment, long reads and in-depth analysis interviews with senior finance professionals

Access the results of our market-leading annual surveys across core financial services

Access the results of our annual awards, including the world-renowned Awards for Excellence

Your print copy of Euromoney magazine delivered monthly

£73.75 per month

Billed Annually


Unlimited access to and, including our top stories, long reads, expert analysis, and the results of our annual surveys and awards

Sign up to any of our newsletters, curated by our editors


Already a user?

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