Bloomberg Surveillance · Tuesday, July 7, 2026
Stephen Major explains that the bond market rally may begin in the third or fourth quarter, driven by expectations of no further Federal Reserve hikes and potential cuts later in the year. He highlights that the entire explanation for current bond yield movements is tied to market expectations around the Fed, not structural changes like de-globalization.
“So just no more hikes and then the possibility of some cuts later this year or next year is the engine behind a possible bond rally starting in the third or fourth quarter.”
“So that's a four a four to twenty five basis point move, that's one hundred basis points. So the entire explanation of what's going on with bond yields is just down to market expectations.”
“But people are dressing it up as if it's something else, something more structural. I don't buy the anti globalization or the dedollarization.”