Early October 2018 was only six months ago, but it may feel even more distant considering the 10-year yields in the U.S., Germany, and Japan were trading around 3.20%, 0.58%, and 0.16%, respectively. At the time, PGIM Fixed Income provided their most recent forecast for the long-term central tendency for G3 rates. While they may not have anticipated reaching these levels as soon as Q1 2019, they arrived amid further evidence of sluggish global economic growth, contained—if not below target—inflation, and significant policy responses by major central banks.
- In “Whiplash!,” Robert Tipp, CFA, Chief Investment Strategist and Head of Global Bonds, looks at the strong performances in Q1 and the factors that may affect the markets going forward.
- Of the specific factors that contributed to the general malaise in Q4 2018, Nathan Sheets, Chief Economist and Head of Global Macroeconomic Research, describes how each of these reversed or moved toward reversal in Q1 2019. As a result, the global economic outlook in “Back from the Brink—But What Next?” is one that appears well supported, but with numerous risks.