James Gruber: What's your view on inflation given that the market is pricing inflation coming down in the U.S.?

Robert Mead: Inflation is still going to be somewhat sticky. We do think it's on the right trajectory to the destination that the Fed will eventually be happy with. It may take another year or so, or maybe even a little longer in Australia, but definitely the destination is back within the range that the central banks are targeting.

Gruber: We've had some carnage in bonds of late. What are the reasons behind that?

Mead: Yeah, economies are proving to be resilient. So, as you see, more and more growth, employment has continued to be strong. Markets were starting to wonder, is this enough, is this enough from central banks to really slow economies? Very quickly thereafter though, we've seen geopolitics rear its ugly head again. Very sad state of affairs that we're witnessing. But any of those risk-off events, we think, is going to be repricing bond markets back to levels like where they are now.

Gruber: I suppose with inflation where it is and cash offering what it is, where should bonds fit into that portfolio for investors?

Mead: Yeah, well, remember bonds are really the only true defensive asset. So, cash is a temporary defensive asset. But if economies do slow further and interest rates come back down, you don't get the benefit of that in a term deposit, whereas you do in the bond market. It's also very important to note that real yields in, especially in U.S. bonds, are still in the mid-2s. So, you are getting a very attractive return. It's not just a high nominal return, but you're also earning a real return now.