With more than a sniff of inflation in the air, bond rates have risen sharply over the quarter. Much larger increases are potentially in store. The safe thing to do now is to sit and wait before taking on any duration.

farrelly’s hears this everywhere - and is dismayed! We believe the economics is wrong, the market timing logic is wrong, and the risk assessment is wrong.

The economics side has been covered many times before by farrelly’s. Essentially, it boils down to the level of household debt in Australia and NZ being so high that neither economy can sustain the...