Bond Investors Are Daring to Whisper About a Return to Fed QE
- Columbia Threadneedle says stimulus may come as soon as 2020
- Traders are already pricing in lower rates over coming years
Bond-fund managers are starting to whisper about the prospect of more Federal Reserve quantitative easing to fight the next U.S. downturn, underscoring just how acute concerns over flagging global growth have become less than three months after the central bank last raised interest rates.
Gene Tannuzzo at Columbia Threadneedle says the likelihood the Fed resumes bond buying in 2020 is increasing as a rising tide of risks prompt monetary officials the world over to pivot toward more accommodative policy. Thomas Atteberry of First Pacific Advisors sees the next U.S. recession occurring in one to two years, and is positioning for the return of QE by moving into three- and four-year Treasuries, as well as mortgage pools with 10- to 15-year amortizations.