Speedy central bank response to the Covid-19 pandemic was “critical” and has been supportive for all risk markets and the wider economy, says Royal London Asset Management corporate bond manager Paola Binns.
In the latest Portfolio Adviser video, Binns says there will always be those who criticise central bank policy for creating asset price bubbles, but the speed and scale of the pandemic response was vital in restoring confidence in markets, not least sterling corporate bonds.
“At one point it looked like there were no buyers of long-dated gilts, for example, so a speedy response from central banks and governments was critical in restoring confidence back in markets and at that point you saw a recovery,” says Binns.
Binns accepts there is a downside for savers in these “ultra-low interest rate times”, but she thinks governments and central banks did the right thing.
“There will always be criticism about asset price bubbles, but you just need to restore confidence into markets and inject some momentum in economic growth – I think it is critical, the part they played.”
Binns also touches on the outlook for rates and where there are pockets of value in the sterling corporate bond market with Brexit looming.
Watch the video above to find out more.
