Will the ILS market continue its growth under the global bond turmoil?
It a bloodbath facing the global bond market. The 10-year treasury yield has jumped from less than 1.5% to more than 2.5% in less than 3 months. It is widely expected that its yield can climb up to 3% in the next month or so. Federal Reserve finally raised the interest rate by .25% on the recent FOMC meeting. Given the fact that catastrophe bonds perform more or less as a fixed income (with a float on top of LIBOR), many people have been wondering if the ILS market can still grow as rapidly as it did during the last 5 years?