Higher for longer: Fixed income popularity mounts as investors prepare for a new rates environment

Developed markets face pressure

Elliot Gulliver-Needham
clock • 5 min read

As central banks poise to hold interest rates higher for longer, a fixed income market used to near-zero rates is set to be upended.

In the second instalment of Investment Week's 'Higher for longer' series, examining the impact persistently higher interest rates are set to force on various corners of the market, we examine the effect this has had on the fixed income market. This week, 10-year US Treasury yields surpassed 5% for the first time since before the Global Financial Crisis. Malin Rosengren, portfolio manager at RBC BlueBay Asset Management, said that a higher for longer environment would force a transfer from low yielding assets into fixed income, as the increased yield of low-risk bonds becomes more appe...

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