Bond Markets and the Economic Recovery
May 29, 2020
The first quarter was one of the most volatile periods on record. The coronavirus’s rapid spread across the world has roiled the global economy in ways that even the Great Financial Crisis of 2008 did not. The pandemic, coupled with the collapse of energy prices caused by the drop in demand and price war between Russia and Saudi Arabia, led to a liquidity crunch in fixed income markets across the world. Investors seeking the safety of the U.S. dollar put pressure on the global bond market, and record outflows from ETFs and mutual funds forced sellers into a market already in free-fall, pushing prices lower.