Schroders closes government bond short position as stagflation worries mount

5 articles · Updated · Bloomberg · Apr 30

Patrick Brenner, multi-asset chief investment officer at the £800 billion UK asset manager, said recession risks have increased as Middle East conflict threatens growth.
The firm said it now sees the conflict as more likely to weaken economic activity than intensify inflation, prompting a reversal of its previous bearish stance on government bonds.
The shift signals warmer sentiment towards sovereign debt as investors reassess whether geopolitical shocks will fuel price pressures or deepen slowdown risks.

Is the global economy now too fragile to withstand major geopolitical shocks without tipping into a deep recession?

With global growth stalling and inflation surging, must central banks choose between triggering a recession and accepting runaway prices?

As a key global waterway remains shut, is a massive shift into government bonds the only safe harbor for investors?