A clear message from ECB President Mario Draghi last week kicked off a dovish shift by major central banks - from patience to inching toward more stimulus. We see the ECB and the Fed likely to ease soon. Yet, while market expectations for ECB easing appear reasonable, expectations for the Fed seem excessive. We believe government bonds still are key stabilizers in strategic portfolios amid rising macro uncertainty, but we are turning cautious on long-term U.S. Treasuries in the short run.
Chart of the week
Developed market government bond yield distribution, 2014-2019
Sources: BlackRock Investment