Central banks

“I believe inflation is largely in the rear view mirror, and the Fed will not be hiking again,” said Invesco’s chief global market strategist Kristina Hooper. And the trend could be a global one.

While still high, inflation in developed economies is showing signs of slowing down according to New York-based investment management firm Neuberger Berman, with markets set to benefit from increasingly stable conditions.

They can either tighten policy to squash inflation or ease to prevent financial contagion, but there’s no right answer for central banks according to Ruffer’s Duncan MacInnes.

Negative-yielding debt topped US$18 trillion at its height in late 2020, representing a quarter of global bonds outstanding at the time. With the stock of negative-yielding bonds now yielding in the positive, owners of the debt face ugly marked-to-market losses – but counter-intuitively, there were investors willing to buy them.

Green shoots of relief from central banks will take some time to filter into the economy due to a confluence of factors according to Sage Capital.

With central banks running out of meaningful avenues to impact economies and markets rife with volatility, many investors will be tempted to dial back risk as much as possible.

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