Over the past month losses have racked up across bond sectors after comments from the Federal Reserve signalling the end of quantitative easing spooked global markets.
Global bonds suffered their fourth-worst month in 20 years in May after Fed chairman Ben Bernanke said the central bank may slow the rate of its bond purchases if the unemployment rate continues to fall amid a strengthening of the economy. Bernanke then rattled market sentiment further this week by stating there will be a reduction in QE in the third quarter of this year if the US economy continues to grow as expected. Fears the market will no longer be supported by bond purchases led to a heavy sell off in US treasuries, with 10-year paper seeing yields jump from 1.75% to 2.42% over ...
To continue reading this article...
Join Investment Week for free
- Unlimited access to real-time news, analysis and opinion from the investment industry, including the Sustainable Hub covering fund news from the ESG space
- Get ahead of regulatory and technological changes affecting fund management
- Important and breaking news stories selected by the editors delivered straight to your inbox each day
- Weekly members-only newsletter with exclusive opinion pieces from leading industry experts
- Be the first to hear about our extensive events schedule and awards programmes