Strategic and Tactical Reasons to own Floating Rate Notes

Fixed rate bonds in Australia and other Developed Markets have been hit hard in 2022, driven by the rapid shift to ultra-hawkish monetary policy in response to inflationary concerns. Divergence has emerged over the expected pace and level of interest rate hikes across countries. 

In the Australian context, risks of further tightening by the Reserve Bank of Australia (RBA) to limit monetary-policy divergence vs the Federal Reserve (Fed), a bearish global rates backdrop till there are stronger signs that inflation is past its peak will likely keep bond volatility high. 

Read more to learn how this underpins the continued attractiveness of Australian Floating Rate Notes  in these challenging markets.