US Bonds Not 'Even Close to a Bubble': Advisor

The US bond market may be rallying, but it's far from hitting bubble territory, Richard Bernstein, chief executive of Richard Bernstein Capital Advisors, told CNBC on Wednesday.

“If there were a bond bubble—remember, bubbles pervade society—if there was a bond bubble, there would be a societal change where people would be rushing to get bonds and leaving their jobs to get Treasurys and things like that,” he said.

As the economy weakens and inflation hovers at 1.2-1.5 percent, it’s normal for rates to head lower, he said. This comes at a time when Treasurys are advancing on weakness in housing and durable goods data. The benchmark 10-year Treasury note was last up 13/32 in price, yielding 2.44 percent, the lowest since late-January 2009.

Bernstein also pointed out that the real yield on the 10-year note remains positive.

“If this were completely irrational, I really think it would be negative,” he said. “What happens these days is people see something outperforming and they don’t understand why it’s outperforming, so they think it’s a bubble. To me it’s not even close to a bubble.”