Feels positive about fixed income. Yields at attractive levels. Expects stability in intermediate/long end, small decline in yields at front end. Credit fundamentals supportive.
Asks about Fed independence and path forward.
David Gura
Tony Rodriguez
Fed credibility key. Some risk to independence, but market comforted by Senate support. Believes transition will make FOMC more dovish. Expects one cut based on macro fundamentals, maybe a second cut later due to dovish tilt.
Asks how politically-driven easing would change fixed income strategy.
Romaine Bostek
Tony Rodriguez
An extra cut would mean a modestly steeper curve, anchors long end. Would make it tougher to get inflation to target, delaying it. Play for steeper curve, but economic fundamentals give comfort to take credit risk.
Asks about US vs. non-US fixed income performance, specifically emerging markets.
Romaine Bostek
Tony Rodriguez
Overweight emerging markets. Macro and structural fundamentals moving positively. Dollar likely stable to weaker, aiding EM outperformance.