Fixed income

When government finances deteriorate, how much of that risk should be priced into the borrowing costs of otherwise healthy businesses?

TwentyFour Asset Management’s Pauline Quirin reflects on a quarter in which securitised markets remained resilient despite interest rate volatility and growing concerns around inflation.

TwentyFour Asset Management’s Gordon Shannon reflects on a quarter shaped by higher energy prices, persistent inflation and government bond volatility.

TwentyFour Asset Management’s Felicity Juckes reflects on a quarter shaped by renewed geopolitical tensions, higher energy prices and government bond volatility.

Fixed income markets are pricing more than the path of interest rates: they are weighing growth, inflation, and governments’ capacity to manage rising debt. From US and Brazilian election uncertainty to Treasury supply and French bond market volatility, investors may want to consider balancing duration and credit risk while discerning headlines from fundamental change.

Are current rate levels justified by fundamentals and what are the implications for fixed income markets? In our view, higher rates are being driven by resilient nominal growth, fiscal pressures, and an energy shock, rather than a broad reacceleration in inflation.