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Bond yields attractive as inflation stabilizes
Wednesday 27 September 2023
Global Investment Views, Equity, Fixed income
Bond yields attractive as inflation stabilizes
October 2023 | Markets have accepted the Fed’s message of higher-for-longer rates, and bond yields have drifted higher. These yield levels, coupled with a slowing economy, allow us to be positive on duration. With yields at historically high levels and inflation expected to slow, and with still-present recession risks, government bond markets offer good opportunities. In corporate credit, primary market activity has been strong and we see potential to benefit from new issue premia by favoring higher-quality parts.
01 | Risk assets have been in wait-and-see mode since summer’s end, but they are still pricing in a soft landing scenario in which inflation continues to fall without any damage to economic growth.
02 | Valuations are not supportive for risky assets due to the recent rally and deteriorating economic fundamentals, particularly for equities and high yield credit.
03 | We see inflation trending lower but remaining above central bank targets in 2024, supporting an argument for keeping rates higher for longer.
Important Information
Unless otherwise stated, all information contained in this document is from Amundi Asset Management US (Amundi US) and is as of September 27, 2023. 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 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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