Irrational boom again? That Bill Gross more worried about the United States bond market

Former Federal Reserve Chairman Alan Greenspan, who 20 years ago on the soaring stock market made "irrational boom" warning.

Close to one-month rally in stocks is pretty amazing, Greenspan also made a similar warning on the market. On December 5, 1996, Greenspan was "irrational boom" implies the stock market rally was boosted by the inappropriate non-rational, hidden after the collapse in a prolonged contraction risk. In 1996, S&P 500 index in 2 consecutive years of Bull, writing 40 years to perform at their best, GE 5 year old warnings failed to stop the index bullish, to the year 1999, gains come 3 times.

But at the same time, United States Treasury prices rally back. The Bloomberg analysis, low inflation, low interest rate environment of recent years, seems not applicable Greenspan about "irrational boom" comments, but the United States record in the 3 major stock indexes have recently, price and profit is also expected to be most beautiful since the 2000 dot-com bubble.

Since Trump accident was elected nearly a month, index March, bond prices retreat.

But even with the pullback, there a bubble in the Treasury market seems, premium on 10-year Treasuries after the July dip to-0.75%, 3 weeks ago to get back above zero.

GE old worried about the stock market, 20 years ago, now he is more worried about bond, 3rd interview in the Wall Street Journal, Greenspan to admit his warning may have little influence, but he reiterated that as long as the bubble again, it is difficult to prevent.

Chris Green of former Fed officials believe that Greenspan's thinking at the Central Bank, is driving up the share price, rather than anticipate bubbles; but now it is not so, the Fed has learned a lot from the Greenspan era, and adopt a more holistic approach. Central Bank itself is an important buyer.

Current Federal Reserve holds $4.4 trillion in bonds, market participants believe that Federal Reserve buying spree that makes bond valuations beyond the fundamentals. Recent events, however, tend not to consider the impact of the Central Bank in the market, but that Trump and his fiscal spending, tax cuts, President, recently raised the US Treasury yields jumped, stock raising, the main reason for the dollar. Bond King Bill Gross, Jeff Gundlach two generations are not optimistic about that, so long as reason to return to this "trump rally" is immediately destroyed.