Weak Economy, Low Inflation, Record Low Bond Yields?

John Mauldin forwarded his subscribers (subscription is free) an interesting article by Hoisington and Hunt today. They point to low inflation and low growth this year rather than an outright recession but also what they describe as "record low bond yields". A continuing fall in interest rates has been one of my themes for a long time and the reason I hold so many bonds (in mutual funds). Falling interest rates mean rising bond values. Periods like this are when bonds perform well and tend to outperform stocks if the reason for falling rates is economic weakness.