Inflation and US bond yields will rise in the medium term

Inflation trends and associated risks around interest rates and exchange rates can have direct sovereign credit implications“Fitch Ratings said in its latest report entitled ‘the impact of inflation on sovereigns depends on real interest rates.’

Key comments

The impact of inflation on sovereigns depends on real interest rates.”

US inflation and bond yields will rise in the medium term.”

“He forecasts US inflation to be 2.5% by the end of 2023 and 10-year Treasury yields 2.3%.”

“Global returns are expected to follow higher US returns, although Japan has shown that low returns can persist on country-specific factors for an extended period.”

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