Nomura: The US CPI is expected to drop to 2% by the end of this year. It is advisable to increase the layout of emerging bonds and financial bonds in the near term.

Nomura Asset Management said on Thursday that it expects US inflation to fall to 2% by the end of this year, but US Treasury bond yields will remain in a high range for a short period of time. In addition to US Treasury bonds, it is also advisable to increase investment in high-yield bonds such as emerging market bonds and financial bonds. He Yucheng, manager of the Nomura Global Diversified Income Bond Fund, believes that due to the current inflation still being far above target, the pace of rate cuts by the Federal Reserve will be gradual. The continued fiscal spending by the US government will put upward pressure on long-term yields. "US inflation is expected to fall to 2% by the end of this year at the earliest, because Trump wants lower rates, and the new chairman of the Federal Reserve will be more obedient," He Yucheng said. He pointed out that the interest rate futures market has fully reflected the expectations of the dot plot, but with Trump's intervention, the policy rate cut may be larger than expected. "But this is in the future, there will not be much change for now, just a sideways consolidation." He also sees potential in emerging market bonds, stating that not only do they have higher yields, but they will also benefit from the continuous decline of the US dollar. He favors a diversified strategy in emerging countries, with a positive outlook on countries like Romania that are expected to experience convergence in interest rates, providing opportunities for capital gains.