Peter Boockvar, chief investment officer at OnePoint BFG Wealth Partners, has warned that markets are still dealing with the aftermath of what he calls the greatest financial bubble in history.
The investor argued that the global bond bear market is far from over and expects U.S. Treasury yields to eventually retest 5%, a move that could pressure stock valuations and the fading AI-driven market rally, according to an interview with David Lin published on July 14.
Boockvar said the bond market remains in a long-term bear cycle and expects Treasury yields to continue climbing, potentially revisiting the 5% level last seen in 2023.
“I think we’re in a bond bear market. I have been saying that for years. We’re in a bond bear market. It is global, and it follows the epic, possibly the greatest financial bubble in the history of bubbles,” Boockvar said.
According to the investor, higher yields could create significant pressure on stock valuations, particularly in growth-oriented sectors that have benefited from years of low borrowing costs.
Boockvar’s concerns center on the unprecedented period when roughly $18 trillion worth of global bonds carried negative yields, a phenomenon that emerged after years of ultra-loose monetary policy by major central banks.
He has repeatedly described the negative-yielding bond market as the largest financial bubble ever created in dollar terms and believes the adjustment process is far from complete.
His outlook comes as government bond yields continue to trend higher across developed economies.
Notably, recent market data shows yields in major sovereign debt markets, including the United States, Japan, Germany, France, and the United Kingdom, pushing toward multi-year highs amid concerns over persistent inflation, growing fiscal deficits, and rising government debt levels.
Caution on AI market rally
Boockvar also expressed caution about the AI-driven market rally, arguing that the generative AI and hyperscaler investment cycle is losing momentum.
He expects the benefits of AI spending to increasingly shift from infrastructure builders to companies that use the technology.
Despite his cautious stance on parts of the technology sector, Boockvar remains bullish on commodity-related investments, particularly energy, agriculture, and uranium, as well as beaten-down consumer staple stocks.
His outlook reflects a broader view that higher inflation and rising yields will continue to favor real assets as markets adjust to the end of the ultra-cheap money era.
