Fixed-Income Outlook: Risk and Reward of Successful 'Mid-Cycle' Rate Cuts

 

In all likelihood, the Fed has successfully staved off recession, but current spreads reflect just how little upside there is in credit.

   

Brian Smedley, Head of the Macroeconomic and Investment Research Group, and Portfolio Manager Adam Bloch, share insights from the fourth quarter 2019 Fixed-Income Outlook.

 
 
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Portfolio Strategy
Fixed-Income Outlook


Q4 2019 Fixed-Income Outlook

In all likelihood, the Fed has successfully staved off recession, but current spreads reflect just how little upside there is in credit.

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Global CIO Outlook
Global CIO Outlook


The Fed's Sugar High

Rational immigration policy, not rate cuts, is the way to avoid recession.

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In the Media
Signs of Growth in 2020 Despite Economic Uncertainty


Signs of Growth in 2020 Despite Economic Uncertainty

Scott Minerd, Chairman of Investments and Global CIO, joins Bloomberg TV on Fed Day to discuss what current Federal Reserve policy says about the state of the U.S. economy.

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Important Notices and Disclosures

One basis point is equal to 0.01 percent.

Investments in fixed-income instruments are subject to the possibility that interest rates could rise, causing their values to decline. High yield and unrated debt securities are at a greater risk of default than investment grade bonds and may be less liquid, which may increase volatility. Investors in asset-backed securities, including collateralized loan obligations (“CLOs”), generally receive payments that are part interest and part return of principal. These payments may vary based on the rate loans are repaid. Some asset-backed securities may have structures that make their reaction to interest rates and other factors difficult to predict, making their prices volatile and they are subject to liquidity and valuation risk. CLOs bear similar risks to investing in loans directly, such as credit, interest rate, counterparty, prepayment, liquidity, and valuation risks. Loans are often below investment grade, may be unrated, and typically offer a fixed or floating interest rate. 

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