Andrew Wells, Fidelity's chief investment officer of fixed income, has warned investors are not prepared for the threat of rising inflation, which poses a bigger risk than shrinking bond market liquidity.
In an investor update, Wells (pictured) said improved growth in the US could lead to inflation picking up. Inflation is currently just 0.2% in the US and -0.1% in the UK on a CPI measure. TwentyFour's Bowie: How to tackle the bond liquidity crisis Wells said: "If you look at US unemployment and the growth in the US, there is a risk that markets will get tighter and tighter, the US will start motoring and we get inflation. "There is a danger posed by an inflationary environment as people are so under protected for inflation. Many fixed income teams have walked away from inflation, f...
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