'Back to the future’ for FX reserve management

Fixed-income investing has had a shake-up. Following an unprecedented recent tightening of monetary policy by central bank policy-makers, bond yields have moved sharply higher. In late 2022, the yield on a five-year Treasury note reached 4% for the first time since 2007.

The speed of the jump in yields has created important ripple effects in both financial markets and in the real economy. The collapse in March of Silicon Valley Bank is a reminder that hikes in interest rates can result in large