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By David HOAG, Tm NG, Damien McCANN Kirstie SPENCE; portfolio managers Capital Group
The enduring resilience of the US economy will be a key driver of financial markets as we look to 2025 and beyond. Having avoided a recession, the US looks to be returning to mid-cycle, according to economic data. At the same time, inflation has continued to ease back towards the US Federal Reserve's (Fed) 2% target, enabling the central bank to begin cutting interest rates.
In this relatively benign economic environment, interest rates are elevated, resulting in yields that are attractive across the spectrum of fixed income asset classes. At the same time, yield spreads to Treasuries for most credit assets are still tight, as demand has remained solid...
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