Chart of the Week: Short-Term Bonds Tend to Perform Well During Inflationary Increases

Chart of the Week | August 02, 2021
Macro Insights

Short-Term Bonds Tend to Perform Well During Inflationary Increases

• Short-term bonds tend to perform well during rising inflation, insulating portfolios from interest rate risk and duration risk.
• Short-term bonds were up five of the six quarters during the six largest quarterly inflation increases of a CPI above 1.4.
• Short-term bonds, as a sector, performed well, but there remains ample opportunity for active managers to gain alpha.