End of bear market beckons for gilts

We entered the new millennium with bonds still an unloved asset class. Fears of a concerted G7 tightening of monetary policy, fuelled by the release of strong economic data and soaring equity prices, undermined sentiment towards bond markets. As January progressed, however, jittery stockmarkets, the announcement of a US Treasury buy-back programme, and some market-friendly economic data, unleashed renewed optimism. The rally was perpetuated by a belief that the pre-emptive stance of central bankers would lower the ultimate peak in short-term interest rates. So, is this the end of the...