Sovereign bonds: a renewed role in fixed income portfolios

After years of volatility, sovereign bonds are back in focus as central banks signal a shift in monetary policy. Easing inflationary pressures, potential rate cuts, and stronger fiscal discipline across developed markets are creating a more attractive environment for government debt. Investors are reassessing duration exposure, with long-dated bonds offering compelling yields relative to risk assets. Meanwhile, diverging policies between the Federal Reserve, ECB, and Bank of Japan are shaping opportunities across different regions. As sovereign issuance increases and liquidity conditions...