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Matthias Knab, Opalesque:

AB (AllianceBernstein L.P.) writes on Harvest Exchange:

Should tighter monetary policy on both sides of the Atlantic worry bond investors? We don't think so. Bonds have historically delivered positive returns when interest rates rise-particularly when they rise gradually.

Of course, we appreciate investors' concerns. After the global financial crisis, central banks provided unprecedented life support for markets and the global economy by cutting interest rates to record lows and buying trillions of dollars' worth of bonds. Ending such massive monetary stimulus won't be easy.

But that doesn't mean it has to be painful or disruptive, either. We expect central banks to withdraw this extraordinary support very slowly.

Interest rates are rising in the US, but the Federal Reserve is moving at a snail's pace-it has hiked rates just four times in 18 months. The Fed will probably reduce its balance sheet slowly, too-likely by letting some of its bonds mature each month without reinvesting the proceeds. Fed Chair Janet Yellen predicted that the reduction, far from roiling markets, would be about as exciting as "watching paint dry."

The European Central Bank, meanwhile, is nowhere near ready to raise interest rates. But with eurozone growth improving, it has signaled that it may soon ......................

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