We see central banks on a path to overtighten policy. Their balance sheet reductions up selling pressure on government bonds, so we’re underweight. We think rates will – and may already have – hit levels that make recessions foretold. That isn’t yet reflected in earnings and market pricing, in our view. The Federal Reserve is set to raise rates by 0.75% for the fourth consecutive time. U.S. jobs data will be closely tracked for signs of the labor market cooling.
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