In fixed income, things can (and probably will) get worse

Genevieve Signoret & Patrick Signoret

Fixed income

  • The U.S. yield curve is flattening again. The real pain will come when it steepens and stocks sell off at the same time. We won’t be found hiding in cash; we’ll ride it out.
  • The current volatility has scarcely bruised U.S. high yield bond valuations. We’re braced for a far more damaging episode ahead, when the Fed starts signaling unmistakably intentions to raise rates.

The U.S. yield curve is flattening again. The real pain will come when it steepens and stocks sell off at the same time. We won’t be found hiding in cash; we’ll ride it out.
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The current volatility has scarcely bruised U.S. high yield bond valuations. We’re braced for a far more damaging episode ahead, when the Fed starts signaling unmistakably intentions to raise rates
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