Hoisington Investment Management Co., a bond management company famous for being optimistic about US Treasury bonds for over 30 years It has now turned bearish. The latest quarterly report released to investors by the Austin-based asset management firm indicates that fiscal deficits and rising capital demand form a “broader structural context,” which “indicates that both inflation and long-term US Treasury yields will tend to rise.” As for inflation, “the long-term equilibrium range is rising” to 3.5%-4.5%, Hoisington wrote, “there is a significant risk that the inflation rate will exceed 5%.”

Hoisington Investment Management Co., a bond management company famous for being optimistic about US Treasury bonds for over 30 years It has now turned bearish. The latest quarterly report released to investors by the Austin-based asset management firm indicates that fiscal deficits and rising capital demand form a “broader structural context,” which “indicates that both inflation and long-term US Treasury yields will tend to rise.” As for inflation, “the long-term equilibrium range is rising” to 3.5%-4.5%, Hoisington wrote, “there is a significant risk that the inflation rate will exceed 5%.”