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A Prominent Bond Bull Says Treasuries Rally Isn’t Over Yet

  • Hoisington rejects ‘overwhelming’ consensus rates will rise
  • Its Treasury fund lapped field with 20% return last year
A statue of Albert Gallatin, former U.S. Treasury secretary, stands outside the U.S. Treasury building in Washington, D.C.

A statue of Albert Gallatin, former U.S. Treasury secretary, stands outside the U.S. Treasury building in Washington, D.C.

Photographer: Andrew Harrer/Bloomberg

The conventional wisdom that inflation will be rekindled in the U.S. -- ending the massive Treasuries rally and driving up yields -- is bunk, according to a Texas fund manager whose three-decade bullish stance on bonds propelled another banner year in 2020.

Being bullish on Treasuries is still warranted because the economic harm from the pandemic “will take years” to repair, Hoisington Investment Management Co. said in its latest quarterly report. Reasons to trust the bond rally include “massive” global debt loads that blunt the impact of monetary policy and the diminished ability of government spending to help the economy, the fund manager said.