Our outlook for bonds assumes that the current trade tensions do not escalate into a full-blown global trade war that leads to a recession. While that is a non-trivial risk, we do not think it the most likely outcome. Rather, we believe that the U.S. will be able to renegotiate some aspects of its trading relationships without the current and threatened tariffs becoming permanent. However, we are monitoring developments closely and will make adjustments to the portfolio structure if they become appropriate.

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