/perspectives/portfolio-strategy/q1-2018-fixed-income-outlook

Walking the Risk Tightrope

Current conditions could persist for some time, but with a possible recession approximately two years away, the time for caution is approaching.

February 21, 2018



Fixed Income Outlook video

Adam Bloch and Brian Smedley share insights from the First Quarter Fixed-Income Outlook


Fixed-Income Outlook

First Quarter 2018

Fixed-income markets have been walking a risk tightrope for several quarters. Bonds in most sectors are trading above par, yields are historically low, and spreads are near or below pre-crisis levels. The best that a bond investor can reasonably hope for in this market is to earn the coupon, while principal is at risk from an active Federal Reserve, the looming increase in Treasury supply, geopolitical risk, and any credit deterioration. Current conditions could persist for some time—economic growth is accelerating, monetary policy is not overly restrictive, and optimism is high—but history has shown that with a recession approximately two years away, the time for caution is approaching.

 
 
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FEATURED PERSPECTIVES

September 17, 2019

Forecasting the Next Recession: Will Rate Cuts Be Enough?

History shows that once our recession forecast model reaches current levels, aggressive policy can delay recession, but not avoid it.

August 22, 2019

Looking Past the Liquidity-Driven Rally

Credit spreads could get tighter in this liquidity-driven rally, but history has shown that the potential for widening from here is much greater.

July 29, 2019

The Fed's Sugar High

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


VIDEO

Third Quarter 2019 Fixed-Income Outlook 

Third Quarter 2019 Fixed-Income Outlook

Portfolio Manager Adam Bloch and Matt Bush, a Director in the Macroeconomic and Investment Research Group, share insights from the third quarter 2019 Fixed-Income Outlook.

Core Fixed-Income Conundrum 

Solving the Core Conundrum

Anne Walsh, Chief Investment Officer for Fixed Income, shares insights on the fixed-income market and explains the Guggenheim approach to solving the Core Conundrum.







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