Asks if the labor market takes precedence for the Fed now that inflation stability is achieved.
Romaine Bostick
Russell Brownback
The Fed's statutory mandate of price stability has been achieved; the front and center of their reaction function is now the labor market, which is supply-constrained.
Asks about AI-driven productivity improvements becoming a Fed discussion point.
Romaine Bostick
Russell Brownback
Super heartened that Chair Powell identified AI-driven productivity as an influence. There's been a stealth productivity inflection higher since the pandemic, and it's set to inflect even higher with generative AI.
Asks about the surge of bond issuance to fund AI buildout and its impact on investors.
Katie Greifeld
Russell Brownback
The surge of issuance is very welcome due to previous scarcity in credit markets. It creates tactical trading opportunities, especially if it comes at a concession.
Asks why the high-yield market isn't growing despite inflation.
Katie Greifeld
Russell Brownback
In a rising rate environment, lower-rated borrowers have incentive to go into the floating-rate loan market. The overall high-yield market has amazing technicals supporting tight spreads.
Asks if a meaningful widening of spreads is anticipated soon.
Romaine Bostick
Russell Brownback
Excited about the environment. Tight spreads are justified by good credit quality, but the capex supercycle, waves of issuance, expected M&A, and marginal uptick in defaults create dispersion and picking opportunities.
Asks about concerns over due diligence in private credit and how to avoid pitfalls.
Katie Greifeld
Russell Brownback
In a world of too much money and not enough yielding assets, you have marginal lenders making marginal loans. The answer is to have a sophisticated lens, know your collateral, and negotiate strong covenants.