FICC Focus Banking Chaos and Central Bank Hikes: Credit Crunch
The inflation vs. recession debate and how that will drive Fed pause vs. pivot dynamics is casting a shadow over credit markets. Key questions include whether the tightening of lending standards will drive up defaults or whether resilient fundamentals will prevent this.
In our sixth episode of the Credit Crunch podcast, host Mahesh Bhimalingam, Chief European Credit Strategist at Bloomberg Intelligence and Robert McAdie, Head of Global Cross Asset Strategy at BNP Paribas, discuss the banking crisis, macro headwinds due to central bank tightening and its impact on risk-free and risk assets, including credit. They address yield-curve inversion and its correction, and its impact on the credit curve. The podcast also highlights quantitative tightening by the ECB and BOE and what can cause the markets to spook.