The next big test for bond markets

Patient bond investors have been rewarded in 2014, says Nick Gartside, international CIO for fixed income at J.P. Morgan Asset Management.

Global zero interest rate policy and low volatility are forcing cash into bond markets, continuing to hold down government bond yields and bolster risk assets. It would seem this is proof of the old dictum ‘don’t fight the Fed.’ For investors, that also applies to the European Central Bank, The Bank of England, and the Bank of Japan, all of which have pursued coordinated unconventional intervention to pump liquidity into global markets. This was in evidence during the recent ECB announcement, where policymakers reiterated their determination to exhaust their toolkit in order to ease c...