Head of Asian fixed income at Principal Asset Management, Howe Chung Wan, has shared his thoughts on the bond market and the disconnect between the Federal Reserve and markets.
Following the recent bond rally, Wan believes the market is certain that the tightening cycle is over, and while the Fed claims there will be no rate cuts this year, the market still anticipates them.
Wan predicts that the end of hikes is likely closer than expected, with rate cuts not happening until inflation and labor markets become more decisive.
As for Credit Suisse and the recent market roiling in Europe, Wan sees the situation as an isolated incident that provides an opportunity to buy in Asia.
Overall, Wan suggests that the yield curve will flatten or remain stagnant as the end of the rate hiking cycle draws near.