Bond Market Volatility & Economy

Bond yields serve as a leading indicator of economic performance, with major headwinds in the form of inflation and labor shortages, short-term yields have begun to invert demanding higher premiums than longer-term bonds.

As the bond market moves in anticipation, volatility increases and serves as a signal to the broader economy.

MOVE provides a benchmark with bond market volatility, with an uptrend and spikes nearing Feb/Mar 2020.

The chart presents measurements going back to lat 2002, reflecting a dramatic uptick in volatility as the housing market collapsed in 2008.

The uptrend reflected now is serving as another warning to the markets that turbulent times lay ahead.

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