Remain agile in bond selection, with an eye on last mile inflation

Tuesday 23 April 2024

Investment Talks

   

Remain agile in bond selection, with an eye on last mile inflation

April 2024 | Though the US economy and consumers appear to have largely defied the "gravitational pull" of significantly tighter monetary policy, we continue to view the risk of a recession during 2024 as higher than normal. We expect that such a recessionary scenario would lead to significantly greater interest rate cuts, while the "no landing" scenario of more persistent inflation would delay the start of rate cuts. As developed economy central banks continue to grapple with when to start normalizing local monetary policy, now could be an interesting time for investors to strengthen their portfolios by extending the duration of their fixed income portfolios and raising credit quality and liquidity profiles while carefully weighing global opportunities.

01 |  Markets have been reassessing their expectations of US Federal Reserve policy rate cuts.

02 | We remain agile in fixed income markets with a focus on quality.

03 | While we are cautious on high yield, we are looking for opportunities in securitized credit, higher-rated corporate credit and insurance-linked securities.

Remain agile in bond selection, eye on last mile inflation

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Unless otherwise stated, all information contained in this document is from Amundi Asset Management as of April 22, 2024 . Diversification does not guarantee a profit or protect against a loss. The views expressed regarding market and economic trends are those of the [author] and not necessarily Amundi Asset Management 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 or service. 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 indicative of future results. Amundi US is the US business of Amundi Asset Management.

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