A major investment firm is steering clients away from U.S. bonds and toward foreign government debt, citing better opportunities as central banks worldwide aggressively fight inflation while the Federal Reserve hesitates.
George Bory, chief investment strategist at Allspring Global Investments, told CNBC this week that bond markets in the UK, Europe, and Australia now offer stronger returns because their central banks have already raised interest rates substantially—moves the Fed has yet to match.
“Bond markets everywhere have rushed to price inflation,” Bory said. “Places like the UK, certainly across Europe, even places like Australia—we’ve seen a material run-up in central bank tightening expectations.”
European Central Bank Already Acting on Rates
The European Central Bank raised rates just weeks ago and is expected to tighten further. But Bory warned that unless the Federal Reserve validates similar aggressive moves, foreign central banks may have to slow their pace below what markets currently expect.
Allspring manages money primarily in fixed income, money markets, and stocks for clients ranging from financial advisors to corporations and institutions. The firm is now recommending short to intermediate duration government bonds from developed markets outside the United States.
What This Means for American Retirement Accounts
“Short to intermediate duration global government developed market bonds [are] not a bad spot to be, especially for those central banks that are really tethered to inflation,” Bory said. “If they’re going to move aggressively, that” offers better protection for investors.
The recommendation reflects growing frustration among investment professionals with the Federal Reserve’s slower response to inflation compared to foreign counterparts. While Americans face rising prices at gas pumps and grocery stores, the Fed has moved more cautiously on rate increases than the Bank of England, European Central Bank, or Reserve Bank of Australia.
For Americans with 401(k)s or IRAs, the shift suggests professional money managers see better inflation protection abroad than in traditional U.S. Treasury bonds. That’s a significant change from the decades-long convention of treating American government debt as the safest harbor during economic uncertainty.
Key Points
- Major investment firm now recommends UK, European, and Australian government bonds over U.S. Treasuries
- European Central Bank and other foreign central banks have raised rates more aggressively than the Federal Reserve
- Shift reflects concern that Fed’s slower response leaves U.S. bonds more vulnerable to continued inflation
https://www.cnbc.com/2026/06/27/inflation-as-major-reason-to-invest-in-global-bond-markets.html – June 27, 2026
