Invesco Bond Market Insights: April 2024
Key takeaways
Global inflation pressure is contained
We expect inflation to stay well behaved through the balance of the year. Progress toward lower inflation will likely be slower and bumpier going forward than during the second half of last year, but we believe the direction of inflation is down.
Inflation targets shortfalls won’t stop interest rate cuts
We may not get inflation down to central bank targets this year, but that should not stop many global central banks from starting to cut interest rates. We expect major central banks to cut rates this year.
Overweight risk
We favour being overweight risk, given the very positive macro backdrop. However, we favour keeping risks tightly controlled, as very tight valuations limit the potential upside for risky assets.
As we enter April 2024, we expect the global economy to generate slow, but steady growth in the coming quarters. The US economy in particular has shown good momentum. Alongside low inflation and easing financial conditions, the environment is very supportive of financial markets.
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