Alberto Gallo on Investor Complacency, Crisis Risks and Fed’s Dilemma
Macro Hive Conversations With Bilal Hafeez
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The Risk of Recession in the Credit Market
In government bonds, generally there's not many things we like. Most long-end parts of curves are yielding below inflation. Even risky bonds like BTPs have a very tight spread. So essentially, you're not getting paid a lot. You're still betting on an economic deterioration - which might or might not happen but it's pretty consensus that we'll have a recession.
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