2024 marked the fourth consecutive year of rising US yields, for the first time since the early 80’s. We have been patient in recent years going overweight duration in our multi-asset portfolios as we have persistently viewed the risks to US nominal growth relative to consensus expectations as skewed to the upside.
Highlights
- After four straight years of higher US 10-year yields, we now enter 2025 viewing duration as attractive.
- The risks to consensus expectations on growth and inflation are no longer clearly skewed to the upside, right when the market has priced out a significant degree of easing from the Fed.
- The incoming administration’s policies are likely to be less inflationary and the Fed’s reaction function to tariffs less hawkish than the current discourse suggests.
- We like stocks and bonds going into 2025, while using selective long US dollar exposure to hedge against a further hawkish repricing of the Fed or significant rise in tariffs.
You can now read the full whitepaper at the link below
