Excess Returns · Saturday, August 29, 2026
Kevin Muir discusses the current state of the bond market, noting that while it feels volatile, its actual ranges have remained relatively stable. He attributes the perceived volatility to factors like a rise in nominal GDP, elevated deficits, and significant corporate bond issuance driven by the AI build-out, alongside global fiscal stimulus efforts.
“So, I guess I'm going to push back a little there on you, Matt, because although it does feel like it's lots exciting and this is happening, it really is actually somewhat stayed in terms of its its actual ranges. It's not like we're getting big, huge monster moves.”
“So in the past, we, you know, three years ago or two years ago, the US had a 7% deficit to GDP, the rest of the world was running two, two and a half in terms of the developed world, like here, I'm Canadian, we were running two, two and a half, Japan was two and a half, Europe was two and three quarters or something.”
“And so when I think about this environment, you know, we just have nothing but supply and and and people are losing their minds because we have a nominal GDP of six and a half and the long bond has gone to 530.”