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The Rising Cost of Capital: Bond Implication

Time to rethink fixed income portfolio

Arif Husain, Head of International Fixed Income
T. Rowe Price,  August 2023

After languishing near zero for over a decade, US interest rates have risen at the fastest pace in modern history. It’s a tightening policy that’s been mirrored by central banks around the world. 

For now, financial markets appear remarkably unaffected. Labour markets remain buoyant, economies are still growing and equity markets have rebounded strongly from their October 2022 lows. 

T. Rowe Price’s fixed income investment professionals believe things are set to change. During Free Talk, a biannual Fixed Income Webinar, they believed we are likely witnessing a classic lag between central bank policy action and its after-effects. 

And as signs of recession begin to appear, they went on, it’s time to add duration to a fixed income portfolio. 

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