Yield curves to flatten as rates go up

Fund manager's comment

We believe the global economy is likely to slow in the second half of the year. However, this does n...

We believe the global economy is likely to slow in the second half of the year. However, this does not necessarily preclude central banks, in particular the US Federal Reserve, from tightening policy. Bond markets within the G7 should face upward pressure on yields, with another increase of 50 to 100 basis points for 10-year maturities quite possible, as the degree of leverage involved in the market, unwinds. However, since we do not believe that inflationary pressure is endemic, this may prove a good buying opportunity. This would be particularly true within index-linked markets, if th...