BSJQ - Fixed-Income Outlook: Don't Miss The Forest For The Trees
2024-04-02 07:36:00 ET
Summary
- Markets continue to experience heightened volatility as participants pay close attention to every new economic data point, trying to divine the timing of the first central bank rate cuts.
- But investors who are overly focused on data surprises may lose sight of the bigger picture: Central bank rate cuts are coming, and with them a major opportunity for bond investors.
- Historically, as central banks eased, cash flooded out of money markets and back into longer-term debt. The resulting surge in demand for bonds from such shifts in flows helped to reinforce the drop in yields that accompanies central bank rate cuts.
By Scott DiMaggio, CFA
Bond investors who are overly focused on individual data points may lose sight of the bigger opportunity picture....
Fixed-Income Outlook: Don't Miss The Forest For The Trees