Strategic Fixed Income: the turn of the global liquidity cycle
3 minute watch
Jenna Barnard, Co-Head of Strategic Fixed Income, explains how the team have viewed the bond markets through the prism of interest rate divergence for a number of years now.
Key points:
- There is a clear divergence in interest rate policies within the developed markets, with the US Federal Reserve standing alone from the pack.
- As a consequence of the monetary policy divergence, US dollar strength is driving a series of liquidity events.
- The Strategic Fixed Income Team see the pressures in the financial markets this year as linked, due to the ‘liquidity withdrawal environment’, and not idiosyncratic, as many believe.
- The uptick in inflation is, in their view, cyclical and not structural.
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3 minute watch