Optimism Prevails

September 2005 | Bond Sentiment Index

The Federal Reserve's decision to lift the Fed funds rate by another 25bps, to 3.75%, is a clear indication that, despite the near-term economic threat posed by Hurricane Katrina, the effect will be transitory in nature. As a result, US and, indeed, global growth should remain buoyant, which will keep commodity prices high. This, together with low G7 bond yields and improving debt dynamics across the emerging markets (EM) universe, continues to underpin the EM debt asset class. Against this backdrop, our September Bond Sentiment Index (BSI) has rallied by 0.8 points to 99.8, highlighting the ongoing sense of optimism

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