While participants await the presumptive rate cuts from most major central banks, yields remain in rarefied air. Considering that yield is destiny, the demand for fixed income will continue exerting its influence across the global bond markets in the quarters to come.
In “A New Quarter, Similar Positive Outlook,” Robert Tipp, CFA, Chief Investment Strategist and Head of Global Bonds, looks at the likely rebalancing needed across many portfolios, the consequences of investors’ cash accumulation, and the potential composition of fixed income returns.
We then turn to our global economic expectations in “An Improved Balance of Risks and its Policy Implications,” by our Global Macroeconomic Research Team. The minor adjustments that we’ve made to our economic scenarios are largely indicative of the two-sided growth and inflation risks that appear more prominent as we look ahead. Yet, there is more that is feeding into the tail risks with geopolitics and global fiscal stimulus each contributing to the elevated left and right tails.
A summary of our geopolitical risk scenarios, a compilation of factors supporting global economic resiliency, and our sector views round out our expectations for the second quarter and beyond.