JPMorgan Sees Rising Risk of Bond Tantrum That Could Hit Stocks
- Strategists point to deteriorating liquidity, positioning
- Current market environment similar to 2013 taper tantrum
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There’s a significant risk of an abrupt sell-off in the bond market, which could also engulf stocks, according to JPMorgan Chase & Co.
A gradual increase in bond volatility, a deterioration in market liquidity and vulnerable investor positioning risk sparking a “bond tantrum,” given the low level of global yields, strategists including Nikolaos Panigirtzoglou wrote in a note Friday. The current environment brings back memories of episodes of sudden volatility spikes, such as the one seen in 2013, the year of the taper tantrum, they said.