PVI - Fixed Income Investment Outlook Q2 2021: Real Yields Inflation Breakevens And Risk Assets - The Changing Environment

• The fixed income world is beginning to undergo a multiyear transition as aggressive monetary accommodation and government spending across key economies drive higher near-term economic growth rates.
• The result could be a shift to higher real rates as output gaps narrow, as well as moderately higher but stable inflation, reflecting the more persistent and stronger economic backdrop.
• In our opinion, this bodes well for risky assets, but will likely be accompanied by increased volatility and changing correlations.

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