JM Finn's Jon Cunliffe: Trump's long shadow over fixed income markets

'The things bond managers fret about'

The fixed income outlook is finely balanced, with a high degree of uncertainty surrounding the impact of US President Donald Trump’s policy agenda on growth, inflation, central bank policy, government borrowing and geopolitical risk.

In short, all the things bond managers fret about. But before we talk about Trump, we need to discuss the UK economic outlook. The Labour government's October Budget landed badly with businesses, with the rise in employers' National Insurance contributions criticised for weakening conditions in the labour market, driving up costs and harming business and consumer sentiment. However, it is the prospect of increased supply of UK gilts to the market which has been a bigger focus of the UK bond investor since the autumn. Inflationary pressures 'far from tamed' as CPI comes in higher...