Bloomberg Surveillance
Surveillance: 'Screaming Buy' with Lyngen
Aug 30, 2023
Ian Lyngen, BMO Capital Markets Head of US Rates Strategy, believes the 10-year treasury is a 'screaming buy.' Other topics discussed include the US avoiding recession, China's current trouble, and the balanced state of the US. Also explored are the impact of supply chain shifts, adapting to high interest rates and low default rates in the high yield market, and the potential effects of interest rates on companies and economic growth.
28:44
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Quick takeaways
- Companies have prepared for rate increases and reduced the risk of defaults in the high-yield market by extending maturities and improving balance sheets.
- Despite slowing job growth, the Federal Reserve's aim to maintain 2% inflation could prolong the economic cycle and avoid a recession.
Deep dives
Impact of Federal Reserve's decision on interest rates
The podcast discusses the potential consequences of the Federal Reserve's decision to cut interest rates. It emphasizes that companies have already prepared for rate increases by extending maturities and improving their balance sheets, reducing the risk of defaults in the high-yield market. The overall economic cycle is expected to continue, as the current interest rate environment is not seen as a hindrance to corporate borrowing or generating free cash flow. Market experts remain constructive on the equity market, predicting a strong finish to the year with moderate returns.
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