Fixed Income

Tariff front-running behavior makes the April hard economic data difficult to interpret, but we take the strong reading from Food Services spending as a signal that the US consumer has not yet buckled.

A weakening economy will apply downward pressure to Treasury yields, but the Trump term premium will keep long-dated yields higher than they would otherwise be. This makes Treasury curve steepeners the most attractive trade in US fixed income.

The easing bias remains, but not all central banks are equal. This Central Bank Monitor update reveals who is ready to cut more and who is still pretending not to.

Our Portfolio Allocation Summary for May 2025.

Today, we are introducing an additional ‘high-frequency Joshi rule’ which is updated weekly. The Joshi rules tell us that a US recession is not imminent. Until the Joshi rules are triggered, overweight non-US government bonds, and especially UK gilts, versus US T-bonds. And shift cyclical asset allocation from overweight to neutral-weight bonds. Plus: tactically long USD/GBP and tactically underweight global industrials (EXI).