February 2011. It’s going to take at least seven years to work off enough consumer and government debt to close the output gap that opened in the recent recession and get the economy growing consistently at trend again, in our view. In the meantime, we believe the Federal Reserve and other major central banks will keep a lid on interest rates until economic growth is stimulated sufficiently to reduce private sector debt to a more manageable level.
In this paper, we make the case that the resulting stable rate environment should bring comfort to bond investors in 2011. This is not the year to worry about your bond portfolio – unless you’re looking for better than 8% returns. In that case, we argue, high yield and emerging market debt could provide opportunities. (Leer aquí)