Fidelity fixed income CIO: Investors 'under protected' against higher inflation

Bigger risk than bond liquidity

Andrew Wells, Fidelity's chief investment officer of fixed income, has warned investors are not prepared for the threat of rising inflation, which poses a bigger risk than shrinking bond market liquidity.

In an investor update, Wells (pictured) said improved growth in the US could lead to inflation picking up. Inflation is currently just 0.2% in the US and -0.1% in the UK on a CPI measure. TwentyFour's Bowie: How to tackle the bond liquidity crisis Wells said: "If you look at US unemployment and the growth in the US, there is a risk that markets will get tighter and tighter, the US will start motoring and we get inflation. "There is a danger posed by an inflationary environment as people are so under protected for inflation. Many fixed income teams have walked away from inflation, f...