PANews reported on May 8th that BlueBay's Chief Investment Officer, Mark Dowding, stated in a report that the firm still expects the Federal Reserve to refrain from policy adjustments in 2026. However, with inflation beginning to decline in 2027, they are increasingly convinced that the next move in US interest rates will be a reduction, not an increase. Dowding said that the yield on the 5-year US Treasury bond is unlikely to sustainably rise above 4%. Based on this assessment, BlueBay has shifted its break-even inflation trade on its medium-term US Treasury Inflation-Protected Securities (TIPS) to directly going long on inflation-linked bonds.