Why experts from public banks are now recommending bonds

Why experts from public banks are now recommending bonds
Frankfurt Stock Exchange

The experts are now already advising young investors who are thinking long-term to invest in shares.

(Foto: Bloomberg)

Frankfurt The capital market experts of the institutes in the Association of Public Banks (VÖB) advise long-term investors to continue to focus on shares and to increasingly invest cash in bonds. Dekabank chief economist Ulrich Kater said: “Bonds are interesting again.”

The background to this is that, according to economists’ forecasts, the yields on ten-year Bunds will stabilize above two percent and those on the corresponding US bonds will stabilize at around four percent.

Because inflation is tending to fall, the real yield on ten-year maturities in Germany recently rose above zero and has already reached around 1.5 percent in the USA. This is shown by a calculation by the Bayerische Landesbank from which inflation expectations have already been deducted.

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