Forward Guidance
Kathy Jones: The Bull Case For Bonds, And The Need For “Caution” on Private Credit & Leveraged Loans
Dec 12, 2023
Kathy Jones, Chief Fixed Income Strategist at Schwab, discusses the bull case for bonds, caution on private credit & leveraged loans. Topics include the inverted yield curve, declining term premia, bond market tracking, bond supply's effect on price, the state of mortgage-backed securities, investment options beyond treasury strategy, and bond market sentiment.
56:28
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Quick takeaways
- Adding intermediate-term duration in high-quality fixed income is a reasonable approach in the uncertain bond market.
- Central banks are expected to make interest rate cuts in response to falling inflation and slowing economic growth.
Deep dives
Bond market volatility driven by economic expectations
The bond market experienced significant volatility due to shifts in economic expectations. Strong third-quarter GDP growth led to increased yields, but later economic indicators suggested a slower growth environment.
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