The pressure building at the short of the Treasury curve should nudge rates higher in the second half of 2014, which should sit fine with Fed Chief Janet Yellen as long as she sees U.S. economic growth, said Alan Cauberghs, Investment Director of Fixed Income Management at Schroders. Cauberghs said investors need to remain flexible in their fixed income allocations and embrace currency risk, especially when "rock star" central bankers are engaged in global monetary warfare. Finally, Cauberghs said European corporate bonds are a better buy than US corporates considering the hefty support coming from the ECB.

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