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Jim Bianco

Say Goodbye to Stocks and Bonds Moving in Opposite Directions

We may be entering a period when they rise and fall in unison.
Welcome to the new age.

Welcome to the new age.

Photographer: Ahmad Al-Rubaye/AFP/Getty Images

The post-crisis era has been dominated by a risk-on/risk-off trading environment where risk assets such as stocks and safe assets such as bonds move in opposite directions. That may no longer be true.

Some have dismissed the recent spike in volatility as an isolated derivatives debacle rather than a regime shift in trading patterns. Yet, these gyrations are the results of rising inflation fears that are fueling concern that central banks may exit the markets sooner than anticipated.