Why experts from public banks are now recommending bonds

Frankfurt The capital market experts of the institutes in the Association of Public Banks (VÖB) advise investors with a long-term orientation to continue investing in 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 at 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, in which inflation expectations have already been deducted.