News

05 Jul 2022

Bonds still matter even as inflation stays elevated

Every quarter, our GFICC senior investors gather to formulate a consensus view and a strategy roadmap for the fixed income markets3.

Our GFICC team believes that central bank policy, global growth and inflationary pressures have reached a major inflection point. Investors, based on individual investment objectives and risk appetite, could consider a diversified suite of income sources with active short duration4 management.
 


 

  • We expect global growth has peaked and may decelerate in 2022. Gross domestic product (GDP) is expected to settle in at 4% in the US and 4.5% globally over the second half of 2022, supported by the employee’s return to job market, inventory rebuild and China’s credit impulse, which measures the growth of new financing as a part of its gross domestic product.
     
  • Though high demand for goods, rising wages and home prices are pushing US inflation higher, we expect to see a peak in inflation in the first quarter before going down to 2.25%-2.5% on core personal consumption expenditure (PCE) by end-2022 as some signs of easing good supply constraints have emerged.

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