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Aren’t bonds supposed to provide support to falling stocks? That’s how things seemed to work during the two decades before COVID. 

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Welcome to the Know the Difference Minute for Wednesday, September 27th.
Aren’t bonds supposed to provide support to falling stocks? That’s how things seemed to work during the two decades before COVID.
It’s a different world now, but similar to what we had from the 60s through the 70s. Then, inflation was the drummer setting the beat for the markets.
When inflation was a rising concern, stocks and bonds marched lower. When inflation fears abated, they marched higher.
From the late 90s through 2020, inflation was put in hibernation and stocks and bonds marched to their own tune.
Now, the big drummer boy is the Fed. The Fed wants to hold rates high and perhaps too long. That has cast a cloud over the growth outlook. Bonds also have the beat of the drum from high debt issuance from the government to dance to. The tune can change eventually.

I’m Brian Jacobsen, Chief Economist at Annex Wealth Management. That is your Know the Difference Minute.