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Author: Eoin O'Callaghan

Global Bond Strategist

Publication date: Jul 2017

Fixed Income Outlook — Central bank balance sheets and impact on asset prices

Macro and market | Appears in: Fixed income, Central banks, Interest rates, Quarterly/monthly series

While global monetary conditions remain very loose, central banks have slowly been starting to tighten policy. The speed of tightening will be crucial for markets, and will hinge on what happens to investment and productivity. We believe central banks will proceed slowly and cautiously, although significant risks remain, including a potential relapse in US sentiment should President Trump fail to deliver his pro-growth agenda. We set out in this paper our assessment of the impact of central bank normalization on individual fixed income asset classes.