The New, New Normal

Real long-term Treasury yields are now at their highest levels since 2010, signaling a shift from the "New Normal" of low rates. While this offers attractive income, the era of bonds reliably hedging equity losses is likely over due to massive U.S. deficits and rising debt.

This new environment, dubbed the "new, new normal," retains some aspects of the past like inequality and modest growth, but also introduces unprecedented fiscal challenges. The article suggests investors should embrace bonds for income, consider international equities for diversification, and seek broader hedges against downturns beyond traditional Treasuries.