Is it Time to Add Duration to Fixed Income Portfolios?

Friday 17 June 2022

Investment Talks

    

Is it Time to Add Duration to Fixed Income Portfolios?

June 2022 | The real federal funds rate must be positive—one indicator of restrictive financial conditions--in order to control inflation.  The market is anticipating a positive real federal funds rate in late 2023, suggesting that now is an appropriate time to add duration to fixed income portfolios, and that a 60%/40% equity/bond allocation is appropriate for prudent investors.

01 |  Inflation in the US has never been “tamed” without the federal funds rate exceeding the Consumer Price Index (CPI), a key measure of inflation.

02 |  The market is anticipating a positive real federal funds rate in late 2023, suggesting now is an appropriate time to add duration to fixed income portfolios.

03 |  Intermediate bonds typically diversify equity risk, and we believe that diversification potential is even more important in the current market environment.

Is it Time to Add Duration to Fixed Income Portfolios?

Important Information

Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of June 17, 2022. Diversification does not guarantee a profit or protect against a loss. those of the author and not necessarily Amundi US and are subject to change at any time based on market and other conditions, and there can be no assurance that countries, markets or sectors will perform as expected.These views should not be relied upon as investment advice, a security recommendation, or as an indication of trading for any Amundi product. This material does not constitute an offer or solicitation to buy or sell any security, fund units or services. Investment involves risks, including market, political, liquidity and currency risks.Past performance is not a guarantee or indicative of future results. Amundi Asset Management US is the US business of the Amundi Asset Management group of companies.

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