Worst US Bond Selloff Since 1787 Marks End of Free-Money Era
Carnage from the bond market—where the rout is worse than anything you’ll find in the history books—is spreading, and the implications are nasty.
Strategists at Bank of America Corp. recently got their hands on US bond market data going all the way back to the founding of the nation. And it shows, they say, that never before has there been an extended period of losses like the past three years.
It’s hard to know, of course, just how accurate the figures were from those early post-colonial years. (How often could bonds have traded during the War of 1812?) Still, there’s something jarring about a worst-in-236-years statistic. It’s a poignant reminder of the magnitude of the pain rippling through the financial world in the aftermath of an inflation shock and interest-rate surge that few saw coming. The pain was severe enough to take down Silicon Valley Bank and three other regional lenders this year and pushed others into crisis until policymakers in Washington rushed to prop them up.