Fidelity sells US treasuries

Fidelity fund manager George Efstathopoulos sold 10- and 30-year U.S. bonds in December. Fidelity International’s Singapore-based fund manager George Efstathopoulos sold most of his U.S. bond portfolio on the back of expectations that there was still room for growth in the U.S. economy. Efstathopoulos, who helps manage about $3 billion in income and growth strategies at Fidelity, sold most of his 10- and 30-year U.S. bonds in December, shifting to investments that generate returns when the economy is growing. “We are no longer expecting a recession in the U.S.,” Efstathopoulos said. “The probability of no decline is still low but increasing. If that probability increases, we probably won’t be talking about Fed rate cuts in 2024.” Efstathopoulos is among those who are cool on bonds because the resilience of the U.S. economy is forcing investors to rethink their expectations of rate cuts. Some have gone a step further, speculating that the Fed’s next move could even be a rate hike after recent strong inflation and employment reports. “The U.S. economy is showing signs of accelerating again rather than slowing down. I wouldn’t be surprised to see signs of growth in manufacturing PMIs from advanced economies over the next few quarters,” said Efstathopoulos, who has also sold U.K. and German bonds.