BNPP AM - Asset Allocation Video - March 2021
- 04 mins 36 secs
A rise in US yields in anticipation of changes in official interest rates has unsettled markets recently, even as the US Federal Reserve has made it clear that it does not intend to tighten policy rates anytime soon. Market disbelief reflects strong economic data, among other things. Equities have dropped, in part also due to the fall in the inflation expectations, but we expect only a temporary dip in price pressures. At the same time, we believe that higher interest rates reflect stronger (future) growth, which should be positive for equities. And while the pace of vaccinations should pick up further, even as new virus variants emerge, it is our view that a more complete resumption of activities is likely later this year, adding to the positive backdrop for equities. So which allocation to equities is appropriate now? And what about the other asset classes?