Bloomberg Surveillance Markets Rally as Powell and Policy Uncertainty Loom
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Jun 30, 2025 Jeffrey Rosenberg, a Portfolio Manager at BlackRock, shares his insights on the evolving bond market, highlighting shifts in interest rates and warnings for investors. Meanwhile, Ebrahim Rahbari, Head of Rates Strategy at Absolute Strategy Research, discusses the outlook for global interest rates and inflation amidst uncertainty. Their conversation offers a deep dive into how economic indicators shape financial strategies, providing listeners with essential context as they navigate complex market dynamics.
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Bond Market's New Environment
- The bond market has signaled a return to positive real interest rates, differing significantly from equity markets in volatility.
- Fixed income returns are largely driven by yield, marking a shift back to a more traditional investment environment.
Credit Market's Benign Outlook
- Credit risk pricing reflects very benign conditions, requiring cautious positioning towards higher quality and defensiveness.
- Income generation through yield and spread remains attractive, despite risks of increased defaults if economic slowdown worsens.
Rethinking 60-40 Portfolios
- The traditional 60-40 portfolio needs reevaluation in today's inflation and monetary policy environment.
- Past success came from low inflation and accommodative Fed policies, conditions now harder to rely on.