The sharp spike in bond market volatility has been “30 years in the making” and “isn’t going away”, according to Pictet’s Jon Mawby, who warned that fixed income investors will need to adopt a different approach to buying into the asset class.
Head of investment grade credit Mawby(pictured) said that the widespread surge in inflation has called time on an era of unconventional monetary policy, which has created "a period of ever-intensifying financial repression" as central banks purposefully held interest rates below inflation levels. "When, in 2006, then-UK Chancellor Gordon Brown claimed to have ended economic ‘boom and bust', he was right - to a point," he reasoned. "But the side effect of smoothing these cycles through highly interventionist policies was periodic and severe bouts of volatility. "These have included the...
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