Global Bond Market Brief

Notes from the Global Fixed Income Desk

By Rich Taylor & Joyce Huang, CFA - February 2020

Our Global Outlook

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.

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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