The Markets How to Trade a Credit Expansion
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Nov 14, 2025 
Anshul Sehgal, the Global co-head of Fixed Income, Currency and Commodities at Goldman Sachs, dives into the U.S. economy's shift from fiscal to credit expansion. He explores the implications for portfolio strategies, emphasizing the rise of AI-driven sectors like semiconductors and commodities. While optimistic about stocks, Sehgal highlights the importance of focusing on specific areas and keeping liquidity. He also discusses the macro risks in private credit and what key economic data to watch leading up to the Fed's next meeting.
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Fed Likely To Cut Once Then Reevaluate
- The Fed is divided but Powell likely wants one December cut then pause to reassess.
- Data between now and the meeting is the key uncertainty for policy timing.
Growth-Inflation-Labor Disconnect
- Growth looks robust driven by fiscal tailwinds while labor and inflation remain mixed.
- The Fed's mandate centers on labor and inflation, so weak labor argues for cuts despite strong growth.
Handover From Fiscal To Credit Expansion
- The economy is undergoing a handover from a fiscal expansion to a credit expansion.
- Credit expansions favor selective winners and require active allocation rather than broad ownership.