Benign inflation, a dovish central bank and healthy yields have helped boost the global attraction of European government bond and credit markets. With further monetary easing expected, European fixed income continues to look selectively compelling.
We maintain our belief that economic growth is likely to slow, but that a severe U.S. downturn appears unlikely. Against this backdrop, we remain constructive on global equity markets heading into the second half of 2025 and highlight potentially more attractive opportunities.
We believe the Federal Reserve is likely to soon join other central banks in further cutting interest rates, likely providing a tailwind for shorter-duration U.S. bonds.