bond bubble

Thought I can ask some Level 2 experts in the forum: what does it mean when they say “bond bubble will burst soon” in the papers? I recall from Level 1 that Interest rates are up recently 'cos of Bernanke’s hinting at monetary policies/QE tapering - so bond prices fell. I get that far and then blank out at all the jargon thereafter. If someone can explain - that will be great. Thanks.

Is this a joke? Interest rates and bond prices have an inverse relationship, so when intrest rates are very low as they are now bond prices are high. Good luck in Level 2…

That’s confusing. Interest rates are not so low now, in the recent weeks/months rates they increased (as seen in mortgage rates increasing by more than 1 percentage point to 4.5+). And bond prices are falling per the inverse relationship.

So what does a bond bubble mean in this scenario?

When the 10yr yield breaks 3% again, ask the question again.

op… maybe you need to spend some time on a bloomberg terminal, watch cnbc/bloomberg once in awhile, or just read any finance related book that came out after 2007. The rates we have now are still extremely low and far from normal when viewed in a historic context. Central banks around the world have been printing money nonstop for almost 6 years now. The Fed currently is buying 85 billion dollars worth of Treasuries and MBS bonds each month! This has driven down the yields and lifted prices of these assets. Now, given the tapering talk that happened awhile back, and the resulting spike in yields. What do you think will happen when the FOMC decide to stop the QEs all toghether?

here is a good illustration of the Fed’s QE programs.