Felix Zulauf is a renowned Swiss-born fund manager and macro analyst who’s been active in the markets since the 1970s.
His track record is excellent, so when he speaks, everyone listens.
And – he was recently on this “Thoughtful Money” podcast with Adam Taggert: Markets Will Be Gut-Wrenching Next Year — The S&P Could Crash 40%
In that podcast, Zulauf explains that the 10 Year Treasury yield could spike to 5.5% early next year (which could push mortgage rates up almost 2% from today’s levels) – before plummeting over the rest of the year.
He also explains that the S&P 500 could easily crash by as much as 40% off its peak, and I recommend listening to the podcast for more info.
In this David Lin podcast, Zulauf further explains that the 10 Year Treasury yield will eventually exceed 8%, triggering a worldwide depression because the entire world economy is dependent upon debt – and NOBODY can afford rates that high (not countries, companies, or consumers).
Jim Bianco is another renowned money manager and macro analyst who thinks rates could easily bounce back up: 10-year yield will rebound to 5.5%, predicts market forecaster Jim Bianco
I can find numerous analysts who disagree with both Bianco and Zulauf, as they point out that the inverted yield curves, falling oil prices, and the shrinking supply of dollars (especially “Eurodollars”), among other things, tell a very different story – and I tend to agree with them.
But, I am sharing Mr. Zulauf’s and Mr. Bianco’s perspectives to show that I don’t live entirely in an echo chamber of analysts screaming “rates will fall;” to remind everyone again about how little consensus there is in these very unusual times; and, most importantly, to remind everyone again that rates rarely move in a straight line.
Mr. Zulauf definitely agrees with the consensus that rates will fall next year, but he is quite adamant that they will rise sharply first.
So, this is a final reminder to be ready for anything, particularly a roller coaster ride when it comes to rates and stock prices.
