Monthly Report
Higher for longer inflation and policy rates become more than a tail risk
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Fed concerns about inflation were vindicated by stronger January data. Expectations on rates are now more defensive, as markets adjust to “higher for longer” risks on rates, but deep curve inversion gives no reward for duration risk. HY credits outperformed, helped by short duration. Chinese bonds remained a safe haven.
Key highlights:
- Growth & inflation expectations – Doubts about soft landing for inflation increase?
- Yields, curves and spreads – Central bank caution prevails as bearish inversion develops
- Performance – Duration proves the unreliable friend again in February
- Sovereign and climate bonds – Relative performance dominated by country weights and duration
These reports provide actionable insights on global fixed income markets. They cover shifts in global yield curves and credit spreads, across sovereign, inflation-linked and corporate indices, and FX-adjusted return performance using proprietary month-end data from our global fixed income indices.
For specialist content on a range of investment topics, including macroeconomic analysis and how it affects market performance and multi-asset analysis, viewed through our indices and data, explore our Global Investment Research hub.
