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Markets
Dec 2022

Owning Treasuries as an Offset to Credit Risk

 Treasuries can offer distinct diversification benefits to fixed income investors. Several leading economic indicators have deteriorated this year pointing towards increased recession risk for 2023 but Treasuries tend to outperform other fixed income sectors during recessions and act as a deflation hedge. The upheaval in fixed income markets broadly in 2022 has led to enhanced yield profiles and potentially positive real yields for Treasuries should inflation recede.