Mike Swell

Rising Yields, Inflation and Risk Assets

Mike Swell, Liz

Fixed income global portfolio managers oversee more than $700 billion in assets while analyzing rising treasury yields as a temporary repricing of long-term supply driven by new fiscal stimulus rather than a sustained inflationary crisis. The speaker contrasts current market dynamics with the 2013 "taper tantrum," emphasizing that the Federal Reserve intends to maintain an accommodative stance through 2022 to achieve full employment without raising rates until 2023. Consequently, investors are advised to view yields of 2% to 2.25% on the 10-year bond as a buying opportunity and to increase allocations to credit and municipal bonds as bonds resume their historical role as portfolio ballast against equity volatility.