De-inversion of yield curves continued during the month. An increase in 10 year bond yields relative to 2 year bond yields over the month weighed on both bond and equity returns for the month. Investors are re-calibrating valuations as risk-free rates and long term bond yields are changing. The prospect of higher interest rates for longer is changing risk/reward considerations for all asset classes.

Investment markets were up in July due to optimism regarding evidence of softening inflation. However, this didn’t stop some central banks from tightening monetary policy further. The US Federal Reserve raised interest rates in July to a range of 5.25-5.50% along with the European Central Bank raising rates to 3.75% the highest level since the year 2000. The Reserve Bank of Australia kept rates on hold in July.

Investment markets were up in July due to optimism regarding evidence of softening inflation. However, this didn’t stop some central banks from tightening monetary policy further. The US Federal Reserve raised interest rates in July to a range of 5.25-5.50% along with the European Central Bank raising rates to 3.75% the highest level since the year 2000. The Reserve Bank of Australia kept rates on hold in July.

In May investment markets fretted over the US Government’s debt ceiling negotiations as Democrats and Republicans aimed to strike a deal that would suspend the debt-issuance cap for 2 years to avoid a default. Any default would have significant ramifications for the US dollar and the credit quality of US debt with impacts felt across asset classes.

In May investment markets fretted over the US Government’s debt ceiling negotiations as Democrats and Republicans aimed to strike a deal that would suspend the debt-issuance cap for 2 years to avoid a default. Any default would have significant ramifications for the US dollar and the credit quality of US debt with impacts felt across asset classes.