Yahoo Finance

Why this economist has 'never been this excited' about bonds

With the new year ahead, Vanguard senior economist and head of economic research Kevin Khang joins Wealth! Host Brad Smith to discuss his expectations for the bond market (^FVX, ^TNX, ^TYX). Heading into 2025, "We've actually never been this excited about the bond market as an asset class, Khang tells Yahoo Finance. He says there are two factors that translate to "a really attractive yield" for the asset class. "The first one is the productivity boom that we've been experiencing, [in] our view is likely to continue beyond the next year ... into the next decade, which then means there's a greater likelihood of high economic growth and then high sort of neutral rate kind of goes hand in hand with that," Khang says, "The other force is the debt-to-GDP ratio, the level of indebtedness that the economy has that is just set to continue to grow ... and there's really only one way to do that, and that is to continue to issue debt." To watch more expert insights and analysis on the latest market action, check out more Wealth here. This post was written by Naomi Buchanan.