U.S. Bond Market Drawdown Sets 71-Month Historic Record
Claire Weston
US investment-grade bonds have been in drawdown for 71 months — the longest and deepest on record since 1976. Holders are approaching six years without breaking even, and no recovery is in sight.
How extreme is a 71-month drawdown?
Charlie Bilello, chief market strategist at Creative Planning, cited the Bloomberg US Aggregate Bond Index on Wednesday. The current drawdown began in August 2020 and has now lasted 71 months — the longest ever recorded for the index, whose data goes back to January 1976.
This means → anyone who bought US investment-grade bonds in the summer of 2020 is still underwater nearly six years later.
In plain terms = bond prices fell and never climbed back to the purchase level. That "never climbed back" stretch has now broken every record in half a century of data.
How deep is the drop?
The peak-to-trough decline reached 17.2%, also the deepest drawdown the index has ever recorded.
The previous record was the July 1980 – October 1981 episode: it lasted just 16 months with a maximum decline of 9.0%.
In plain terms = the current drawdown is more than four times longer and nearly twice as deep. This is not a marginal new record — it is a different order of magnitude.
What does this mean for investors?
Holders of US investment-grade bonds have been sitting in the deepest loss zone in history for nearly six years, with no meaningful recovery yet.
This means → the long-standing assumption that "bonds are the safe asset" is facing its most severe test since the index began tracking in 1976.
When this drawdown will bottom out remains the market's central unanswered question — the data so far say only that it has not ended.
Content is for reference only, not financial advice.