Understand emerging markets opportunities and the American Century advantage.
By Rich Taylor & Joyce Huang, CFA - February 2020
U.S. Treasury yields posted their largest monthly decline since August, as investors reacted to China’s growing coronavirus outbreak. Such market-moving events highlight the importance of active management in uncovering global opportunities.
Economy. The U.S. economy expanded at a 2.1% annualized pace in the fourth quarter of 2019, matching the third quarter’s pace. While the economy may slow somewhat in early 2020, we expect trend-level growth of 2.0%-2.5% for 2020 overall. We believe the U.S. economy will remain among the world’s strongest.
Rates. The Fed remains on hold and insists it will remain that way for the foreseeable future. Rates are still much lower—and even negative—in key European markets. Treasury yields likely will remain rangebound.
Inflation. Year-over-year headline and core CPI converged at 2.3% in December, while the core personal consumption expenditures remained below the Fed’s 2% target level. Inflation in the U.S. remains higher than in other developed markets, and we expect it to remain relatively stable in 2020.
Notes from the Global Fixed Income Desk
Monthly analysis of the global bond market.
The return potential of developing economies is a given. But, the ability to capture it without undue risk is not.
As the credit cycle ages and corporate bond investors grow increasingly defensive, we believe select strategies may continue to deliver value.
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.
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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