New years often start with a few events to challenge any calm investors may have achieved over the Christmas/New Year break. Some of these prove short lived like the global growth scare at the start of 2016 or the US inflation and interest rate scare in early 2018. Others have a more lasting impact such as the coronavirus pandemic.

This year we have seen the year start with an attempted “insurrection” by a mob of Trump supporters and a sharp back up in bond yields. This has all come at a time when share markets have become a bit vulnerable to a correction after a strong run up. The rise in bond yields begs the question whether we have at last seen the end of the near 40-year bull market in bonds. But let’s first have a look at US politics as it will likely impact where bond yields go….