Bond Investing Amid Falling Rates and a Slowing Economy

2019 Midyear Insights

    Facebook Twitter LinkedIn Email

By John Lovito - July 5, 2019

A lot has changed in the first half of this year. In 2018, the Federal Reserve (Fed) was committed to raising rates and things were looking up for the U.S. economy. But now, it's a much different story.

The Fed may begin to ease rates, potentially as soon as July. We’re seeing a slowdown in global growth, particularly in Europe and China, and optimism for the U.S. has been tempered by trade tensions with China. Even if this uncertainty is already factored into the markets, growth prospects will likely be less robust than they would have if we didn’t have a trade conflict.

So what does this mean for bonds? We don’t expect a global recession, but from a risk perspective, we want to remain cautious in our portfolios. Click on my video below for more insight on how we’re positioning our fixed income assets.

Transcript

    Facebook Twitter LinkedIn Email

Insights From our CIOs

Get additional fixed income market insights and more in our latest Investment Outlook.

Discover More
  • Related Articles
  • More From Author

The Case Against Negative Interest Rates

Negative interest rates—what are they, who’s using them and how might they affect the U.S. economy? Charles Tan, fixed income Co-CIO, breaks it down.

Emerging Market Debt: It's Time to Get Tactical

Emerging market debt was the subject of much scrutiny in the third quarter, but Sr. PM Margé Karner believes that too many investors were painting with a very wide brush. Hear her thoughts on current valuations and how to pick your spots for exposure in a Q4 2018 outlook video.

Navigating the Late Credit Cycle: Fixed Income 2019

Volatility makes many investors nervous, but Fixed Income Sr. Portfolio Manager Kevin Akioka sees opportunity amid changing market conditions.

    As the U.S. Hikes Rates, Will Other Central Banks Follow?

    Data suggests the European Central Bank might start raising rates in the middle of 2019. In his latest quarterly outlook video, CIO John Lovito explores what it means for the fixed income investor.

    Fed Hopes Lower Rates Spark Higher Inflation

    For the first time in more than 10 years, the Federal Reserve cut short-term interest rate—a move Fixed Income Co-CIO John Lovito says “provides a cushion for U.S. economic growth and inflation.”

    Bond Investing Amid Falling Rates and a Slowing Economy

    A talk shifts from rising rates to rate cuts, Fixed Income co-CIO John Lovito explains what he thinks lies ahead for the rest of 2019.

      Investment return and principal value of security investments will fluctuate. The value at the time of redemption may be more or less than the original cost. Past performance is no guarantee of future results.

      The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.

      American Century Investments is not responsible for and does not endorse any comments, content, advertising, products, advice, opinions, recommendations or other materials on or available directly or via hyperlinks from Facebook, Twitter or any third-party website. Facebook, Twitter and LinkedIn are registered trademarks of their respective owners.