Co-Head of Strategic Fixed Income Jenna Barnard explains why she feels bond markets are at a critical inflection point and which factors she expects will determine the outlook going forward.
- A year ago, bond markets were pricing in rate hikes; today, they are pricing in substantial interest rate cuts as global economic growth has slowed.
- The key question is whether the current downturn becomes more serious by spreading to the consumer and service sectors, which could lead to swift, aggressive action by central banks.
- The direction and extent of the downturn over the next three to six months will determine the outlook for bond markets going forward.
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