Central Banks Taking Diverging Paths

Robeco's inaugural Central Bank Watcher, authored by its Global Macro Strategy team, examines how the Fed, ECB, PBoC and Bank of Japan are responding to diverging inflation and growth dynamics, with important implications for global fixed-income markets.

• Robeco expects the Federal Reserve to keep rates unchanged despite a more hawkish communication style under new Chair Kevin Warsh, as lower energy prices reduce the urgency for further tightening.
• The firm expects only limited additional tightening from the ECB, gradual easing by China's PBoC and continued policy normalization from the Bank of Japan as regional economic conditions increasingly diverge.
• Across markets, Robeco favours selective duration exposure, identifying opportunities in U.S. Treasuries, long-dated Chinese government bonds and relative-value trades within European yield curves.

Read the full report for Robeco's detailed outlook on global monetary policy, rates and bond market positioning.