Why Goldman Sachs' Bunglawala is bearish on government bonds

Fed is 'behind the curve'

Over the course of 2017, financial conditions in the US have continued to ease and, despite a number of potential headwinds, we remain broadly positive on the market's outlook.

Risk assets, primarily equities and credit, have performed strongly from the lows in 2016, with the first half of 2017 seeing global equities experience the best first half performance since 1998.  While still remaining positive, we believe as the year progressed that plenty of good news was priced in, so we therefore sought to lower our gross exposure, reducing equity beta, and increasing carry. "Trump trades" such as cyclicals vs defensives, value vs growth, and small cap vs large cap have been largely unwound. In equities, we expect positive but moderate returns over the medium ...