For over 30 years, Hoisington, a bullish on US bonds, changes its tune and turns bearish due to escalating inflation and debt.

Hoisington Investment Management Co., a bond management company known for its optimism on U.S. Treasury bonds for over 30 years, has now turned bearish. The asset management company based in Austin, in its latest quarterly report released to investors, pointed out that increasing fiscal deficits and capital requirements constitute a "broader structural backdrop," indicating that inflation and long-term U.S. bond yields will both tend to rise. As for inflation, "the long-term equilibrium range is moving towards" 3.5%-4.5%, Hoisington wrote, "with significant risks of inflation rates exceeding 5%."