What does the normalisation of monetary policy mean for fixed income?

We have reached an inflection point this year where, after several years of extreme liquidity, we are now heading toward monetary policy normalisation.

Reversing the trend is taking us into somewhat uncharted territory, leading to renewed volatility and uncertainty.  Canada Life's Arnaud: New paradigm in bond markets unsustainable In credit, spreads are now offering better value compared to the start of the year, although we expect to see some further spillover effects, with slightly higher spreads by year-end in US investment grade. Indeed, while credit quality is stable, high leverage levels indicate vulnerabilities in some sectors. In contrast, high yield has been resilient, with more sideways trends and slightly more favourabl...