“The stagflationary impulse from the conflict will reshape the growth and inflation risk trade-off, creating a policy dilemma for central banks globally. Overall, we expect central banks to postpone easing, but not to reverse it, a wait-and-see stance seems plausible and appropriate.”
It is time to consider global government bonds; with credit spreads around their all-time tights and equity markets looking expensive, global government bonds are beginning to get the attention they deserve. Starting yields are meaningfully higher than they’ve been over the course of the 2010s and early 2020s, enhancing the return potential of the asset class and supporting its role as a credible source of income, diversification and capital protection.