Fixed Income

U.S. bond fund flows rebounded last week, helped by renewed doubts that the new administration will succeed in implementing its reflationary policies.

The hope and hype that came in the first few weeks after the election didn’t seem to meet the ready cynicism about campaign promises not translating to active policy.

Investors are reevaluating their optimism around President Donald Trump’s fiscal stimulus.

Lack of pro-growth policies by the Trump administration has all but erased any gains the dollar has made.

No bill has been introduced before Congress, yet companies are already taking steps to save once tax reform takes shape.

The much anticipated rate hike last week was based on somewhat subpar economic data, suggesting confidence is getting ahead of growth.

Investors are recoiling from riskier assets amid a mix of deteriorating credit fundamentals for retailers and energy companies and higher interest rates from the Federal Reserve, which will make it harder to refinance debt.

Volatility is coming back to the bond market.

The second week of March also saw redemptions from emerging markets equity hit a year-to-date high.

U.S. Bond funds record outflows for the first time since mid-December, with high-yield fund investors leading the pack out the door.