Global Growth Convergence and Yield Curve Steepening

This report, prepared by Capital Group’s Fixed Income team, offers data-driven insights on macro trends and bond market positioning as of Q4 2025.

• The Federal Reserve’s pivot to rate cuts and a softening US labour market have spurred rallies in Treasuries and credit, with global growth expected to converge between the US and Europe.

• Portfolio positioning favours yield-curve steepeners, selective exposure to investment-grade credit, and high-quality carry in MBS and structured credit.

• While fundamentals remain resilient, tight valuations and US policy uncertainty warrant caution across sectors.

Explore the full report for region-by-region strategies and detailed sector outlooks.