Investors could be pardoned if they have whiplash, but the fact is that interest rates go through paradigm shifts. Indeed, they just migrated from a decade of ultra-low levels back to what may be a sustained period back “home” in their long-term 3-5% range.
Just as investors never caught up with the 40-year secular decline in rates, the inverted curve could be with us for some time, leaving a boon for yield-curve strategies. Furthermore, with the vast majority of rate hikes behind us, market volatility is set to fall. A re-emergence of the “search for yield” is likely to follow, providing a tail wind for spread product and further boosting returns.
These newly restored higher yields should fuel a continuation of the bull market that began in Q4 2022, one driven not by a rapid drop in yields, but simply driven by yield itself. After all, in bonds, yield is nearly destiny.
Learn more in this episode of All the Credit®, featuring Robert Tipp, CFA, Chief Investment Strategist and Head of Global Bonds, and hosted by Tom Porcelli, Chief U.S. Economist, and Mike Collins, CFA, Senior Portfolio Manager, Multi-Sector Strategies.
Recorded on September 20, 2023.
Mapping Geopolitics in Emerging Markets
Deconstructing Commercial Real Estate
Pulse Check on U.S. Interest Rates
Insurance in an Inflationary Age
Holiday Indigestion: The Investment Implications of GLP-1s
Realities in Rates
Value Through Headwinds: What’s Next for European Banks?
View from the Top: Opportunities in High-Quality Credit
Brews and Bulls: Exploring Big Brewers
Quantitative Tightening: Unwinding Central Bank Balance Sheets
Breaking the Bank?: Weighing Looming Risks in the Commercial Property Sector
Down to the Wire: Daleep Singh examines the U.S. debt-ceiling crisis, potential outcomes, and probabilities
Outlook on China—Discussing the Re-Opening, Growth Forecast, and More
Spotlight on the 2023 Banking Crisis
Navigating Default Lines
Hitting Home: The State of the Residential Real Estate Market
Supply Chain Strain Reframe
The Bonds are Back in Town: How the Pandemic has changed the “low for long” into a strategic buying opportunity in bonds?
What’s Next for the Global Economy and the Fixed Income Market? A Discussion with Greg Peters and Daleep Singh
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