DIG - Income Monitor: Q4 2020 - Time To Prepare For Inflation?

• Rising inflation expectations are becoming a key discussion point in 2021. Rates were already on an upward trajectory in Q4, but recent developments fast-tracked those concerns in the new year.
• For investors, the key question is whether rising inflation expectations actually materialize in the economy.
• If inflation were to materialize, it could have a significantly negative impact on fixed income investments by lowering real returns.
• The sweet spot may be in allocating to asset classes that feature both low duration and high yield.

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