Sustainability is crucial in bond management, particularly through ESG (Environmental, Social, and Governance) factors that influence macroeconomic themes like inflation and employment. In the U.S., political gridlock and economic challenges hinder effective environmental policies, while the Inflation Reduction Act (IRA) poses risks for bond investors due to its potential impact on government revenues. The ongoing cost-of-living crisis may lead to public backlash against sustainable policies, complicating their implementation. As inflation eases, consumers still face high costs, threatening sustainable initiatives like carbon pricing. Investors must consider the financial burden of these policies in their strategies.

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