Steering closer to home on rates, underweight belly of curve. Higher inflation for longer regardless of conflict. Growth momentum still decent, inflation pressures remain high, commodities up significantly YTD. Not time to call quits on bearish rates outlook. Fed cuts very difficult - first FOMC dissent steering away from cuts. UK: momentum weaker but still high inflation - 2-3 BOE hikes unlikely but easing also difficult. Unchanged is best hope. Corporate bonds: selectively buying on attractive all-in yields, spreads very tight so cautious. Sovereigns more concerning due to fiscal picture (US, UK, France). Like EM local debt - commodity exporters with positive real rates and steep curves. Gold: short-term challenged by rising yields, but using pullback to 4500 to accumulate. In 3-4% inflation world, gold does well, bonds don't.
US core PCE printing higher. Recent core print was 3.2% in US. Real rates regime closer to 2.7% over last 3 years from Dallas Fed paper on inflation.
