From the Consultants’ Desk: Quantitative Tightening & Bonds

By Mark J. Cintolo, CFA®, CAIA® - Kevin McCullough, CFA®



Natixis Investment Managers Solutions portfolio consultants evaluate model portfolios submitted by wealth managers and institutional clients. From the Consultants' Desk highlights allocation trends and observations derived from portfolios analyzed during the most recent quarter.

Portfolio consultants Kevin McCullough and Mark Cintolo discuss the impact of the Federal Reserve’s quantitative tightening on bond prices — and fixed income portfolio allocations.
  • The backdrop for fixed income investors has been extremely challenging this year as the Fed has begun to reduce the size of its bond holdings, a policy known as quantitative tightening (QT).
  • QT represents an abrupt change from the Fed’s bond purchasing program, known as quantitative easing (QE), that began in 2008.
  • While the program is meant to be a gradual, long-term process, it’s forcing investors to re-examine their overall fixed income allocations.
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This material is provided for informational purposes only and should not be construed as investment advice. There can be no assurance that developments will transpire as forecasted. Actual results may vary. The views and opinions expressed may change based on market and other conditions.

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