Expect volatility as shocks arise from various sources

In a world of slow yet steady, non-inflationary economic growth, interest rates are likely to remain at relatively low levels over the medium term.

With secular stagnation forces at play, we expect monetary policy prudence to prevail, but in the absence of further economic deterioration, any additional easing will now be minimal, removing a performance driver for government bonds.   Coronavirus: A 'true black swan in the making' or a 'tactical opportunity'? Stable macroeconomic outlook and a prudent, if not accommodative, US Federal Reserve and European Central Bank should provide support to credit markets. However, historically tight spreads make credit markets more vulnerable to emerging macroeconomic threats or to a rise in...