Securitized Products
Highlights Chart 1Rate Hikes Lagging Wage Growth
Rate Hikes Lagging Wage Growth…
Highlights High Conviction Views: The global cyclical backdrop remains negative for government bond markets, and the recent declines in yields will not be sustained. We continue to recommend a below-benchmark overall duration stance, favoring U.S. corporate debt with underweight exposures to U.…
Highlights Duration: Bond market positioning is no longer at a bearish extreme and the economy is quickly approaching full employment. We expect Treasury yields will soon break through the upside of their post-election trading range. Maintain below-benchmark duration. Fed's Balance Sheet: The…
Highlights Chart 1Is Inflation Heating Up?
Is Inflation Heating Up…
Highlights Spread Product: Any near-term correction in risk assets is likely to be fleeting. Investors should take the opportunity to increase credit exposure and maintain overweight spread product allocations on a 6-12 month horizon. Duration: Our 2-factor Global PMI model pegs fair value for…
Highlights U.S. equity valuations are historically high, based on a variety of metrics. However, relative to competing assets and global equity peers, U.S. stock valuations are not an extreme. For U.S.-based investors, our upbeat view on the U.S. dollar implies that efforts to diversify…
Highlights Chart 1Keep A Close Eye On Financial Conditions
Keep A Close Eye On Financial Conditions…
Feature Recently we have received a number of client questions about the Fed's balance sheet. When will the Fed start to shrink its balance sheet (if at all)? If the Fed does decide to shrink its balance sheet, how long will that process take? How will the Fed control interest rates in the…
Highlights Rate Volatility: Forecast disagreement about GDP growth and T-bill rates will increase over the course of the year. This, alongside elevated policy uncertainty, will translate into higher interest rate volatility. Treasury Yields: Higher rate volatility should cause the term premium…
Highlights Chart 1Strong Growth & An Easy Fed
Strong Growth & An Easy Fed…