FICC Focus

Bloomberg Intelligence’s chief US Interest Rate Strategist Ira Jersey lays out his latest views on the Federal Reserve and the US Treasury market in this solo Macro Matters edition of the FICC Focus podcast. Jersey discusses why he expects the Fed to remain on hold for at least the next several months even after Jay Powell’s departure and Kevin Warsh’s expected arrival as chair. He examines the significance of recent FOMC dissents, the challenges Warsh may face in trying to build support for rate cuts, and why shrinking the balance sheet while easing policy could prove difficult without broader changes to bank regulation. Jersey also explains how uneven job growth, inflation expectations, and developments in oil prices could shape the path of policy and rates. He also reviews his outlook for the Treasury curve, including why he expects the long end to remain rangebound, the front end to be driven by inflation breakevens and Fed expectations. Jersey closes with his view that Treasury coupon issuance will remain manageable through a continued reliance on treasury bills.

“We always want to be big enough in any given strategy that we're relevant to the market, relevant to our counterparties,” says Grant Nachman, Shorecliff Asset Management’s CIO and CEO, “but we always want to try to be nimble enough that we don't have to own everything.” Nachman joins Bloomberg Intelligence’s Noel Hebert on the latest Credit Crunch podcast to discuss the firm's 'full cycle credit' approach, new challenges in managing a firm as assets and headcount have scale, and remaining disciplined amid growth. The two discuss the importance of relationships, relative value between broadly syndicated loans and high yield corporate bonds, and whether private credit's consolidation phase has impacts for tradeable markets. The Credit Crunch podcast is part of BI’s FICC Focus series. Listen to our previous conversation with Nachman: https://www.bloomberg.com/news/audio/2024-07-19/shorecliff-s-nachman-on-launching-running-a-fund-credit-crunch-lzr0ujfa

In this edition of All Options Considered, BI’s Chief Global Derivatives Strategist Tanvir Sandhu discusses cross-asset volatility, including how markets were largely driven by the same oil-related macroeconomic shock, with equities marked by sharp rallies and slower pullbacks. He also covers this week’s Japanese FX intervention and the rates outlook after key policy decisions.

A changing Federal Reserve, tight credit spreads and renewed opportunities in securitized markets are reshaping the fixed-income outlook. Russ Brownback, BlackRock’s deputy CIO of global fixed income and manager of the Strategic Fixed Income Opportunities portfolio, joins Ira Jersey, Bloomberg Intelligence chief US interest-rate strategist, on this Macro Matters edition of the FICC Focus podcast. Brownback discusses what Kevin Warsh’s expected arrival as Fed chair could mean for policy, why he sees balance-sheet changes happening only gradually, and how public debate among policy makers reflects the complexity of the current economic environment. The two also explore where Brownback sees the best opportunities across global fixed income, from carry trades, maintaining diversified credit portfolios, to structured products such as commercial mortgage-backed securities, asset-backed securities and non-agency mortgages. They also discuss relative value in Europe, improving prospects in emerging markets, and why large US fiscal deficits are a market risk worth monitoring, but not yet a solvency concern.

Despite the war-induced increase in macroeconomic uncertainty, investors are returning to emerging market fixed income as the universe of investible alpha opportunities continues to expand. Arif Joshi, senior managing director and EM fixed income portfolio manager at Bramshill Investments, joins Damian Sassower, Bloomberg Intelligence’s chief EM fixed income strategist, to assess the structural backdrop, as focus shifts to supply shortages across the energy complex. Joshi and Sassower touch on policy, positioning and performance across EM as the war in Iran persists. Listen to this episode on Apple Podcasts and Spotify.