The consensus bearishness on bonds is so universal that it makes me uncomfortable — bond yields are at 5% and everyone still hates them, which is surprising after a decade of zero rates.
Michael notes that everyone from pundits to investors is bearish on bonds, yet 5% yields would have seemed dreamy a decade ago. He questions what would have to happen for this consensus to be wrong. ✦ AI generated
Michael Batnick · The Compound · 2026-07-29 · original ↗
starts at this moment · 16:10
I just feel like with bond yields being so much higher it would really surprise me 5 years ago if you said or 10 years ago if you said listen bond yields are finally going to be at 5% and everyone's going to still hate bonds. What like that that would have been surprising to telling someone that in the zero interest rate world that we lived in like hey real yields are finally going to be juicy enough but people want to like you know get something finally and now everyone still hates bonds. That's surprising to me.
verbatim transcript · starts at 16:10
16:04>> stare off. Okay. >> Yeah. No, it was just I feel like we got to know each other from the eyeballs >> and then you uncomfortably looked away. You had someone has to look away then. >> I I think he blinked actually. I got to be honest. I think he blinked. >> All right. Uh let's talk about something that everyone is bearish on. I think and this is when I say everyone. I know you
16:20always give me crap for that, but I had two I think the consensus take now. You can correct me if I'm wrong here. From the pundit class, from the investor class, everyone is bearish on bonds right now. Is that fair to say? >> You know better than I would. >> Okay. I'm in everyone. Okay, so I'm going to point out two conversation I had in the past week and I've been
16:38hearing this same story everywhere. And I'm not saying these people are wrong. I'm just saying I I I always feel a little uncomfortable when everyone is so consensus on something like this. So I talked to Yuri Timmer last week for asset compound and he says listen the biggest the biggest risks to the market right now, one of them is rising yields, bond yields and that that could because
16:58inflation is high and because the Fed could have to uh raise rates and all these things and he's saying we're in an age of fiscal dominance. This whole idea of the rates falling for 40 years is over. Now it's inflation is going to be higher because of higher deficits, higher government debt, all these things, right? I went in this other local podcast last week. Caveat mour. I
17:16think I said that right. MTOR. >> Mhm. >> Uh Mitch Staple is a guy. He used to be the chief investment officer at Fifth Third Bank. Now he works at this place in Grand. It's called the Red Seedar uh investments. And he he kind of made a similar case as Urian. He's a bond guy. He made the s he's like listen inflation higher uh high you know anything long
17:34duration is going to get smoked like this is not a great environment for that you have to keep your duration low and again I'm not saying these people are wrong I think they probably I would lean more towards them being right in terms of uh the higher inflation thing sticking and and all this but I just feel like with bond yields being so much higher it would really surprise me 5 years ago
17:54if you said or 10 years ago if you said listen bond yields are finally going to be at 5% % and everyone's going to still hate bonds. Like what that that would have been surprising to telling someone that in the in the zero interest rate world that we lived in like hey real yields are finally going to be juicy enough but people want to like you know get
18:16something finally and now everyone still hates bonds. That's surprising to me. >> Yeah. >> So what in what under what would have to happen for these people to be wrong? Just a recession. >> That would do it. Well, I I think listen, you have to be an idiot to just completely dismiss those fears. I guess my question to them my question to them would be >> rates have been high for a while, at