End of month update
Bonds
In January 2025, U.S. bond investors adopted defensive strategies amid uncertainties surrounding the Trump administration's fiscal policies and the Federal Reserve's interest rate trajectory. The Fed maintained the federal funds rate at 4.25%-4.50%, with Chair Jerome Powell taking a cautious approach. Investors avoided long-duration bonds due to potential inflationary pressures from tariffs and immigration policies. The Federal Reserve forecasts two rate cuts in 2025, expecting the fed funds rate to end the year in the 3.75%-4.00% range. Additionally, a ballooning fiscal deficit and substantial Treasury issuance pose further challenges.
From the technical analysis perspective, the US10Y and US20Y yield charts are forming a head-and-shoulders pattern, and if dropping below the neckline should activate downside targets, which will be beneficial for the likes of TMF or IEF or TLT.
China's Economic Developments (January 2025):
In January 2025, China's manufacturing activity unexpectedly contracted, hitting a five-month low, signaling potential challenges for the world's second-largest economy. Despite this, China's economy grew by 5% in 2024, matching the government's target, though many citizens reported feeling worse off due to uneven growth distribution. The International Monetary Fund raised China's 2025 growth forecast slightly to 4.6%, citing the effects of stimulus measures. However, analysts caution that boosting consumer confidence remains essential for stabilising the economy amid these mixed signals.
The Communist Party is going to meet in March and is expected to announce more details about its quantitative easing programme.
Considering other portfolio holdings, PETS is showing good momentum, so are CCI and LAND.
NTLA is struggling a bit after the Morgan Stanley's downgrade, however their cost cutting programme and a change in strategy to focus on core offerings is a strong signal to the market that the management has a firm grip on the budget, which is essential for a medical research company.... Show More
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Sun Apr 19 2026 07:53:12 GMT+0000 (Coordinated Universal Time)
