Understand emerging markets opportunities and the American Century advantage.
By Rich Taylor & Joyce Huang, CFA - November 2019
It was another volatile month for Treasury yields, as investors reacted to better-than-expected earnings, economic and trade news and a late-month rate cut from the Fed. We believe volatility will remain the norm in the near term, highlighting the importance of active management in uncovering global opportunities.
Economy. We expect GDP growth in the U.S. to remain at or slightly below trend levels (2.0%-2.5% annualized), outpacing other developed markets, where growth remains notably weaker. Emerging markets growth should remain relatively stable.
Rates. We believe the Fed’s October’s rate cut likely was the last rate adjustment for a while, as the central bank assesses the economic effects of the year’s three easing moves. Rates remain unusually low or negative in other developed markets—an anomaly that’s fueling robust demand for U.S. bonds and helping to keep U.S. yields unusually low.
Inflation. We expect inflation to remain muted and below central bank targets around the world. We don’t see a near-term catalyst for higher inflation.
Notes from the Global Fixed Income Desk
Monthly analysis of the global bond market.
Sr. Client Portfolio Manager Joyce Huang explains why an unconstrained, "benchmark-agnostic" approach with a rigorous risk-management effort may offer a better solution than tracking a benchmark index.
The return potential of developing economies is a given. But, the ability to capture it without undue risk is not.
After a reprieve in July, volatility has returned to emerging markets assets, thanks mostly to tumult in Turkey.
August 14, 2018
Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.
The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.
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