Gartman on Fixed Income, Inflation & Rates

Dear John,

Each morning, Dennis Gartman rises insanely early to pen The Gartman Letter, one of the most respected investment newsletters in the world. Though often thought of as an equity analyst, Gartman’s interests span the range of capital markets, including commodities, fixed income and more.

Gartman is one of many featured speakers at the upcoming Inside Fixed Income conference, taking place Nov. 2–3 in Newport Beach, CA. Inside Fixed Income is the world’s leading bond ETF investing conference, attracting a who’s-who of leading bond strategists. In the run-up to the conference, Gartman sat down with Inside ETFs’ John Swolfs to discuss the outlook for bonds, inflation, rates and much more.

Inside ETFs: Should investors even bother owning bonds in the current market conditions?

Dennis Gartman: If you’re talking about long-term debt—anything over, let's say, 10-year Treasurys—the answer's probably no. I think the propensity for interest rates to be higher—not dramatically so, but higher over the course of the next six months to two years—is very strong. I think rates will be up 25 to 50 basis points from here.

At the short end of the curve, anything under five years, the impact of a 25- to 50-basis-point rally in the long end is going to be detrimental, but not materially so. So owning a shorter-term security is probably fine.

But I honestly believe that the more-than-30-year decline in long-term rates has ended, and that it probably ended some time last year. I think we're in for a long-term decline in bond prices and a long-term increase in rates.

Inside ETFs: What about inflation? Are you worried it could pick up, and if so, what should investors do about it?

Dennis Gartman: Do I think there will be greater inflationary pressures in the future than there are now? The answer to that is yes. I think we're to the inflection point on wage rates, with unemployment rates at 4.3% or so, and with labor participation actually beginning to hold its own ...

We've published the interview on our media partner, Wealth Management. Continue reading the entire article here.

If you're a fixed-income investor, we hope you'll consider joining us at our annual Inside Fixed Income conference. Check out the agenda and register today.