New York Life Investment Management global markets strategist Julia Herman said U.S. economic resilience implies the neutral policy rate may be higher than previously expected. She warned further rises in Treasury yields could begin to threaten the resilience that has allowed markets so far to absorb tighter financial conditions, and that whether markets remain favorable depends on whether higher rates reflect strong economic fundamentals. On allocations, NYLIM prefers short-dated, low-duration

New York Life Investment Management global markets strategist Julia Herman said U.S. economic resilience implies the neutral policy rate may be higher than previously expected. She warned further rises in Treasury yields could begin to threaten the resilience that has allowed markets so far to absorb tighter financial conditions, and that whether markets remain favorable depends on whether higher rates reflect strong economic fundamentals. On allocations, NYLIM prefers short-dated, low-duration credit as an attractive yield source, saying incremental compensation for extending duration is limited while long-term yields remain volatile.