Fixed Income Outlook 2019: The long and short of it

Posted: Saturday, January 19, 2019 - 09:05 EST

Summary

  • With tightened financial conditions and a synchronized global growth slowdown, both the Fed and Bank of Canada will be cautious in raising rates this year.
  • In the U.S., quantitative tightening may continue to exert upward pressure on the long end of the curve.
  • As valuations increasingly become attractive, and we move late in the cycle, high-quality investment grade credits should continue to provide a good hedge against higher interest rates and ongoing global economic uncertainties.
  • Despite the back up in rates, Canadian fixed income posted modest positive returns in 2018.
  • Active management will become increasingly necessary to take advantage of fixed income market opportunities.

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