CFA Society Chicago Investment Exchange Forum - 2025 Investment Themes - Fixed Income
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Mar 3, 2025 Elizabeth Henderson, CFA, Head of Fixed Income at AAM, and Anthony Woodside, CFA, Head of Investment Strategy at LGIM America, delve into the evolving landscape of credit markets. They discuss how tighter credit spreads may reshape risk-return scenarios and the Federal Reserve's influence on investor behavior. Insights on government policy's impact on sectors like clean energy, the implications of tariffs on inflation, and labor market dynamics present a comprehensive view of the fixed income environment as we approach 2025.
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Tight Credit Spreads
- Credit spreads are currently near historic tights, causing concern for future returns.
- Strong economic conditions and high all-in yields are driving demand, despite the tight spreads.
Interest Rate Impact on Credit
- The interest rate environment significantly impacts company investment and capital strategies.
- Credit markets don't necessarily need the Fed to ease as long as the economy remains strong.
Multi-Sector Strategy Benefits
- Higher fixed income volatility creates opportunities for multi-sector strategies.
- This allows for exploiting relative value across various fixed income asset classes.