The logo for Vanguard is displayed on a screen on the floor of the New York Stock Exchange (NYSE) in New York City, U.S., June 1, 2022.
Despite a "cruel summer for bond investors," long-term bonds continue to remain attractive as the economy will likely enter a shallow recession next year, the world's second-largest asset manager said in a fixed income outlook seen by Reuters.
"The relative advantage short-term government bonds have can fade quickly, and investors can fare better when they lock in higher rates for longer," Vanguard said.
Vanguard said it expects interest rates will not be cut until at least mid-2024, and that bond yields will not return to the low levels that characterized the U.S. bond market in recent history.
"We view high-quality corporates as one of the more attractive places to be in credit," Vanguard said.
Persons:
Brendan McDermid, Bill Ackman, Davide Barbuscia, Ira Iosebashvili, Will Dunham
Organizations:
Vanguard, New York Stock Exchange, REUTERS, Federal, Reuters, U.S, Treasury, Pershing, Capital, Thomson
Locations:
New York City, U.S