Expert Insights - Q&A on global rates and bond yields | Insight Investment

Senior portfolio manager Jeffrey Burger answers questions on Insight’s outlook for us municipal bonds, the team’s favoured sectors and which parts of the municipal bonds market we believe are less attractive.

Key Highlights:

• The easing cycle: With many major central banks now cutting rates, their focus may be shifting towards other economic objectives, such as employment.
• Eurozone challenges: The eurozone faces stiff challenges, including the ongoing weakness of the Chinese economy and potential tariffs from the incoming US administration.
• Divergent central bank policies: The Bank of Japan's rate hikes contrast with the easing cycles elsewhere, driven by higher inflation and a weaker yen.
• China's economic struggles: Structural difficulties in China's economy, particularly in the property sector, could have widespread ripple effects.
• Interest rate trajectories: While most central banks are expected to continue easing, interest rates are unlikely to return to previous ultra-low levels.
• Value in shorter maturities: As interest rates are reduced, we see more value in government bond markets at shorter rather than at longer maturities.

This paper provides valuable insights into the factors influencing global interest rates and bond yields, offering the government bond team’s perspective on the outlook for the year ahead.