Central banks continue to tread carefully when it comes to monetary easing, expressing cautious optimism about inflation yet refusing to commit on the future path of policy rate decisions. Amidst falling inflation and slowing growth, the added complexity of political risk in the US, Europe and the UK has brought greater uncertainty. Even after the European Central Bank (ECB) acted as the first mover to cut policy rates in June, other central banks did not immediately follow in their June meetings.
High-yield bonds have become an increasingly popular investment choice. At Northern Trust Asset Management, we strongly believe this asset class is positioned to continue delivering the strong performance seen in the first half of 2024.
Technical factors and market volatility are creating a value opportunity in the U.S. municipal market. The summer months are typically a quieter, more predictable time in the municipal fixed income market, as supply tends to be modest and demand rises due to higher levels of bond reinvestment.