There’s a lot of optionality left, both in the economy and in the interest rate outlook. The US economy is slowing, but by how much, we still don’t know. That means we have a period of volatility still in front of us for asset markets. Still, the risk-reward for US government bonds and mortgages looks good.
Several weeks ago, I mentioned that the US economy was breaking in plain sight. Only the savings cushion of the richest 20% was keeping the US economy chugging along. My view at that time was that we needed a reprieve in the march higher of interest rates that began in April to avoid a recession.