Bloomberg Surveillance
Markets Welcome Tariff Negotiations amid Uncertainty
Apr 25, 2025
Bob Michele, CIO of Fixed Income at JPMorgan Asset Management, shares insights on the bond market and the expected impact of Fed policies. Tim Adams, CEO of the Institute of International Finance, discusses his talks with the US Treasury regarding the IMF's critical roles. Meghan Graper, Global Head of Debt Capital Markets at Barclays Capital, highlights the brighter side of uncertainty in investment-grade credit amid possible trade deals with China. Together, they explore the intricate dynamics of global finance and the evolving landscape of economic policy.
45:29
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Quick takeaways
- The bond market is stabilizing due to reduced risk from institutional sell-offs and foreign investments in treasuries, despite looming recession fears.
- Global trade dynamics are shifting, causing uncertainty around tariffs and necessitating a strategic approach to foster sustainable economic growth.
Deep dives
Calm in the Bond Market
The bond market currently exhibits an unusual calm due to several key factors that have shifted investor sentiment. A significant deleveraging process has removed higher-risk players from the market, leading to a more stable environment where bond yields have moderated. Contrary to earlier fears about institutional sell-offs, data showed that foreign officials actually increased their treasury holdings, further contributing to a sense of stability. Additionally, recognition from the Federal Reserve about their dual mandate and willingness to intervene if economic conditions worsen has instilled confidence in the bond market response.
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