Steven Major Sees Bonds Facing Stagflation Scenario

• Global bonds are erasing year-to-date gains, with US 10-year yield at 4.2140, UK at 4.711, and Germany at 2.924.
• Elevated energy prices and slowing growth are raising stagflation fears, a scenario not seen since the 1970s.
• The market is currently pricing in a 40-50% probability weighting for the stagflation scenario.
• Key differences from the 1970s include the US being a major oil producer, an older population, increased wealth inequality, and technological advancements.

Steven Major, Global Macro Advisor at Tradition Dubai, discusses the 'spectre of stagflation' becoming a primary concern for global bond markets. He notes that global bonds are erasing 2026 gains due to elevated energy prices and slowing growth, and the market is now pricing in a significant probability of stagflation risk.