Bob Michele, chief investment officer and head of global fixed income at JPMorgan Asset Management, has slashed the firm’s holdings of U.S. government bonds to the smallest since September 2018, according to Bloomberg.
Michele thinks the rally in treasuries (downtrend in yields) has run out of steam and expects a stagnant return for the safest government bonds amid increased flows into securities like corporate bonds and emerging markets debt pegged to growth.
Key quote
We are going to be stuck with low yields for a long period of time. Central banks are going to just control the level of yields in those markets and there are other things to us that look more attractive where we still get high quality and protection on the downside.
The US 10-year yield is hovering near 0.66% at press time, having started the yeat at 1.92%.
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