2019 Fixed Income Outlook

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Throttling Back on Risk Before the Cycle Shifts

Over the past decade, investors across global debt securities have had a good run, boosted since the financial crisis by global central banks’ extraordinary monetary policy accommodation. Recently, the US Federal Reserve’s extended path toward removal of its accommodation through gradual policy rate increases, along with the winding down of its balance sheet, stoked volatility in rates markets. In 2019, the US is poised to enter the tail end of its current tightening cycle, whereas the European Central Bank (ECB) and the Bank of Japan (BOJ) will be at the beginning stages of their path upward toward normalization.