Good morning. A pop higher in the yen yesterday got the rumour mill whirring on whether we had another intervention on our hands. If nothing else, Scott Bessent has got everyone on edge. Will that be enough to put a floor under the currency? Last weekend's 'Chart of the Week' featured two stock/bond efficient frontier curves covering 1986-2020 and 2021-2025, showing bonds lost hedging power in the post-pandemic high-inflation era, questioning the traditional 60/40 portfolio.

The chart triggered extensive reader responses in three categories. Many noted rates rose and bonds performed poorly, particularly in 2022. Others argued comparing a five-year period to 30-plus years was deceptive. Edward Finley at Arrow Wealth broke down 25 years into five-year chunks, showing 2006-2010 also had a broken risk-return profile but differently: 2008 favored bonds, 2009 favored stocks. Finley says this highlights how correlation and volatility change short-term.

Defenders like Rene Jarquin at Single Point Partners and Stephen Foerster of Ivey Business School cited mean reversion. Commenter "Pless" noted current bond prices are more appealing than 2020. Peter Sucaet suggested shortening bond duration and shifting to corporates. Critics like Gillian Clough and Ludovic Subran, CIO at Allianz, reject bonds as diversifiers. The debate centers on whether this is a one-time adjustment or new riskier regime for fixed income.