Capital IdeasTM
Investment insights from Capital Group
Fixed Income
Quarterly macro and market insights from Capital Group’s fixed income team
The statements expressed represent perspectives from Capital Fixed Income Investors, as at 31 March 2024. The views of individual portfolio managers and analysts may differ. © 2024 Capital Group. All rights reserved. Data as at 31 March 2024, and attributed to Capital Group / Bloomberg Index Services Ltd, unless otherwise stated.
Taking balanced risks amid a resilient macroeconomic backdrop
- Stronger economic data in the US drove investors to recalibrate expectations for Federal Reserve (Fed) interest rate cuts in 2024, pushing Treasury yields higher in the first quarter.
- Growth is diverging across regions, a trend we expect will persist going forward.
- Most central banks have likely concluded their rate-hiking cycles and their next move may be to cut interest rates, but the timing and extent of cuts remain highly uncertain.
- Fixed income valuations largely reflect a soft landing, and we are looking to construct portfolios that reflect balanced risks across excess return drivers and diverse macroeconomic outcomes.
- Our highest conviction ideas call for a steepening of the yield curve and positions in agency mortgage-backed securities and credit sectors.
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Past results are not predictive of results in future periods. It is not possible to invest directly in an index, which is unmanaged. The value of investments and income from them can go down as well as up and you may lose some or all of your initial investment. This information is not intended to provide investment, tax or other advice, or to be a solicitation to buy or sell any securities.
Statements attributed to an individual represent the opinions of that individual as of the date published and do not necessarily reflect the opinions of Capital Group or its affiliates. All information is as at the date indicated unless otherwise stated. Some information may have been obtained from third parties, and as such the reliability of that information is not guaranteed.
Capital Group manages equity assets through three investment groups. These groups make investment and proxy voting decisions independently. Fixed income investment professionals provide fixed income research and investment management across the Capital organization; however, for securities with equity characteristics, they act solely on behalf of one of the three equity investment groups.