Aug 17, 2023|Management Insights- 1 min
The US inflation numbers to be released today are very important, as they would reset the bond market globally. Inflation numbers are likely to be in line with expectations; the consumer price index (CPI) is expected to be up to 3.3%, and core CPI down to 4.7%.
We must watch two things: first is the terminal rate and second is the 10-year Treasury yields.
Market sentiment was positive, but people are not considering the decline in market value based on company results.
Inflation might increase in the second half of the year for many reasons, such as rising house rents after reaching the bottom, and the continued increase of wages as well as food, oil, and gasoline prices.
At The Family Office, we do not believe that interest rates will drop as expected, but that they would stay higher for longer. Therefore, portfolios must be managed based on high inflation and interest rates.
Investors must be defensive and invest in short-term bonds with high credit ratings. In the future, investors must invest in private debt.
Watch the full interview above.
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