FICC Focus Artisan’s Cirami Dusts Off the EM Cold War Playbook: EM Lens
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Mar 4, 2025 Michael Cirami, Managing Director at Artisan Partners and expert in emerging debt markets, dives into the intricate world of geopolitical risk in fixed income. He argues that the Cold War offers valuable lessons for today’s investors. Cirami discusses distinctive investment opportunities in struggling nations, the evolving landscape of EM credit amid inflation, and India's rising fixed income appeal. He also highlights the complexities within China's economy and the potential impact of cryptocurrency on emerging markets.
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Late Innings, No Clock
- Cirami believes the current economic cycle is in the late innings, but with no time limit.
- This means the cycle could continue for a while longer, even with extra innings.
EM Rate Cuts vs. the Fed
- Emerging markets (EM) face varying inflation dynamics, making it hard to cut rates against the Fed.
- Latin American central banks, currently cutting rates, may struggle if the Fed continues tightening.
Idiosyncratic EM Opportunities
- Emerging markets offer many opportunities independent of U.S. influence.
- A bottom-up approach, focusing on countries with strong reform narratives, offers great potential.