“After the pullback in yields at the start of the third quarter, we think the market is a little too aggressive in embracing peak rates, and the recent highs will most likely be tested again as the narrative shifts toward the adverse economic consequences of a recession, rather than the rate decisions that have brought us there. As a result, we will monitor and adjust duration accordingly.” — Alexandre Morin
Key takeaways from his comment:
- Bond yields will continue to be choppy because the US Federal Reserve has signalled a terminal rate a little above 4.5% and considerable time before a pivot.
- The Fund’s performance saw strong contributions from the federal and provincial segments.
- The market’s recent highs will most likely be tested again as the narrative shifts toward the adverse economic consequences of recession.
Alexandre Morin, CFA
Senior Director, Portfolio Manager, Fixed Income, iAIM
