Global Bond Market Brief

Notes from the Global Fixed Income Desk

By Rich Taylor & Joyce Huang, CFA - March 2020

Our Global Outlook

As the coronavirus outbreak originating in Wuhan, China, spread across the world, investors responded with a global flight to quality. U.S. Treasury yields fell to new lows in the risk-off climate. These events highlight the importance of professional, active management during periods of heightened volatility.

Economy. U.S. economic data, including figures on wages, personal income, employment and manufacturing, were positive and generally stronger than economic data in other developed markets. Uncertainty surrounding the virus’s impact on global growth likely will lead to a global slowdown in coming months.

Rates. The Fed remained on hold in February, but with the expanding coronavirus outbreak threatening growth, policymakers made a surprise 50 bps rate cut in early March. Other central banks also adopted stimulus measures in March.

Inflation. Rising year-over-year energy prices drove headline CPI to 2.5% in January (data released in February). But the personal consumption expenditures price index remained below the Fed’s 2% target. Inflation in the U.S. remains higher than in other developed markets. We see downside risks to global inflation in the months ahead.

Rich Taylor
Rich Taylor
Sr. Client Portfolio Manager
Joyce Huang, CFA
Joyce Huang, CFA
Sr. Client Portfolio Manager

Global Bond Market Brief

Notes from the Global Fixed Income Desk

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