Exchange-traded funds that invest in the debt has outflows in January and February, the first two-month period since at least 2003 when investments in both ETFs and mutual funds fell.
An employment rate above 7 percent makes it hard to generate inflation, according to Michael Materasso, a senior portfolio manager and co-chairman of the fixed-income policy committee at Franklin Templeton Investments in New York.
Payrolls in March grew by 88,000, the least in nine months and less than the most-pessimistic forecast in a Bloomberg survey, according to Labor Department data released April 5. The share of the working-age population in the labor force, known as the labor force participation rate, fell to 63.3 percent, the lowest since May 1979.
“It will take a while for the consumer to generate enough income which then could put pressure on prices from a demand perspective,” Materasso, whose firm oversees about $394 billion, said in an April 10 telephone interview. Inflation “is not an immediate concern,” Materasso said.
The firm recently sold TIPS, though he declined to specify when or in which portfolios.