Supply-chain snarls and the energy crunch will keep prices elevated despite rising interest rates, said Christian Mueller-Glissmann, managing director of portfolio strategy and asset allocation at Goldman Sachs Group Inc.
The gap between 10-year breakeven and real rates remains near their highest levels since the 1990s, of particular concern to Goldman Sachs strategists. Such a wedge was last seen in 2012.
Nominal bonds have also been hit, with U.S. 10-year yields rising 44 basis points in the past two weeks, the biggest jump over a fortnight since 2016.
“There are a lot of supply-side shocks, not least from commodities,” said Mueller-Glissmann. “Those are likely to linger despite higher rates.”
--With assistance from Heather Burke and Sid Verma.
This article was provided by Bloomberg News.