4 March, 2025

Bond markets in focus amid growth concerns

Summary

Highlights

The high uncertainty on the new US administration’s policies is starting to harm consumer confidence in the US.
We expect the US Fed to cut rates again in 2025, while the possibility of a rate hike remains low despite persistent inflation.
Bonds are back as a key diversification* engine at a time of economic uncertainty.

In this edition

As the new US administration announced tariffs on imports from selected countries and sectors, markets began to question the potential impact on growth beyond the initial fallout on inflation. A few weak US economic data points compounded these concerns, leading to a rapid reassessment of market expectations regarding the Fed’s trajectory, with yields on the 10-year Treasury hitting their lowest levels since the start of the year. This has benefitted the bond markets, which have enjoyed positive returns year-to-date, while equities have struggled over the past week. We believe global bonds will continue to provide income and diversification* opportunities in an uncertain environment.

Bond gains while equity suffered in recent days

Key dates

3 Mar

China Caixin manufacturing PMI, US ISM manufacturing

5 Mar

National People's Congress (NPC), China Caixin services PMI, US ISM services

6 Mar

ECB interest rate decision and press conference, US trade balance

Read the full article on the Amundi Research Center

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