Amanda Lynam, CPA’s Post

In this Global Credit Weekly, we address two main topics: 1) Key takeaways from Fed Chair Powell’s two-day testimony to Congress, and our thoughts on the implications for U.S. monetary policy and corporate credit. 2) A longer-term perspective on how the bifurcation across U.S. consumer income cohorts has become more pronounced. In our view, this has implications for the broader macroeconomic backdrop, as well as dispersion across and within certain consumer-exposed sectors of corporate credit. Please see the most recent Global Credit Weekly for more: https://1blk.co/3Y1apAb For Institutional Investors Only

In this Global Credit Weekly, we address two main topics: 1) Key takeaways from Fed Chair Powell’s two-day testimony to Congress, and our thoughts on the implications for U.S. monetary policy and corporate credit. 2) A longer-term perspective on how the bifurcation across U.S. consumer income cohorts has become more pronounced. In our view, this has implications for the broader macroeconomic backdrop, as well as dispersion across and within certain consumer-exposed sectors of corporate credit. Please see the most recent Global Credit Weekly for more: https://1blk.co/46cnkS0 For Institutional Investors Only

2024 - ASKING ABOUT RATES IS ASKING THE WRONG QUESTION Lower interest rates are already fully priced in for bond an equity markets. But Quantitative Tightening continues strong. For a bull market to last, QT must probably stop. That’s what’s not priced in. A sustained bull market. Read our full article City AM https://lnkd.in/dyJzpPaj Mazars Mazars in the UK #economy #markets #investment #wealthmanagement

🌟Exploring the Significance and Challenges of the Risk-Free Rate in Investments🌟 The risk-free rate, a cornerstone concept in finance, refers to the theoretical return on an investment devoid of financial loss risk. It's commonly approximated using yields on government securities like Treasury bills or bonds, esteemed for their minimal risk of default. Negative Aspect: Despite its pivotal role, the risk-free rate can encounter challenges in reflecting true risk-free conditions, especially during economic turbulence or financial crises. In such periods, government securities may fail to embody risk-free investments accurately, leading to a disconnect between theoretical and practical risk-free rates. Moreover, in environments marked by persistently low or negative interest rates, investors may grapple with locating suitable risk-free assets, potentially skewing conventional valuation models and investment strategies. Let's keep delving into the intricacies of finance and investment, navigating through both its fundamental principles and contemporary challenges! 💼💡 #Finance #Investment #RiskFreeRate #EconomicInsights #FinancialMarkets #InvestmentStrategies #MarketVolatility #EconomicStability

Spreads might appear tight. But with strong fundamentals, positive technicals, a Federal Reseve about to start cutting rates and yields still high relative to the past couple of decades, the rationale for owning US investment grade credit remains.

Despite tight spreads, there are compelling reasons to invest in US investment grade credit. 1) Strong fundamentals and positive technical indicators 2) Anticipated Federal Reserve rate cut 3) Yields are at their highest levels over the past two decades.

𝗜𝗠𝗙 𝗪𝗮𝗿𝗻𝘀 𝗼𝗳 𝗛𝗶𝗴𝗵 𝗖𝗼𝗿𝗽𝗼𝗿𝗮𝘁𝗲 𝗩𝗮𝗹𝘂𝗮𝘁𝗶𝗼𝗻𝘀 𝗧𝗵𝗿𝗲𝗮𝘁𝗲𝗻𝗶𝗻𝗴 𝗦𝘁𝗮𝗯𝗶𝗹𝗶𝘁𝘆 Tobias Adrian, IMF's capital markets chief, highlighted concerns over inflated corporate valuations, indicating potential risks to financial stability. Buoyed by market optimism, these high valuations could become particularly vulnerable to economic shocks. The IMF emphasizes the dangers, especially in tech and credit markets, where a negative shift could trigger widespread pricing adjustments. #finance #news #MarketRisk #CorporateValuations #IMFWarning Source:- https://lnkd.in/dFb3vBDT

In the new Systematic Fixed Income Outlook, my colleague Jeff Rosenberg discusses the improved outlook for bonds as market expectations for policy easing align more closely with the Fed’s projected path of three rate cuts this year. But as Mark Twain famously quoted, “It ain’t what you don’t know that gets you into trouble. It’s what you know for sure that just ain’t so.” Today’s expectations for rate cuts reflect the view that policy is restrictive—a certainty that may not be so as economic strength and easing financial conditions lead to continued uncertainty around the path of policy normalization.   Read the full outlook for Jeff’s views on the economy, monetary policy, and the opportunities and key considerations facing bond investors: https://1blk.co/3xq2PUz

Where are we in the fixed income cycle? What’s priced into government bond yields? What does the inflation playbook look like? Franklin Templeton Institute's analytical fixed income framework revolves around these three critical questions. Read more: https://s.frk.com/4cvbfKg. This content is intended for institutional investors.