Bloomberg Talks Marathon Asset Management's Bruce Richards Talks 2% Target, Potential Pause
6 snips
Dec 18, 2024 Bruce Richards, Chairman and CEO of Marathon Asset Management, shares his insights on the 2% inflation target and its implications for the economy. He discusses the potential pause in interest rate hikes and how this may impact credit markets. The conversation delves into the complexities of inflation and fixed income investment strategies amidst economic shifts. Richards also addresses the evolving landscape of public and private equity, and the effects of new regulations on lending, offering a fresh perspective for investors in today's climate.
AI Snips
Chapters
Transcript
Episode notes
Fed's Inflation Target Shift
- The Federal Reserve (Fed) likely abandoned its 2% inflation target due to persistent core CPI above 3% for 43 months.
- Factors like tariffs and pro-economic policies contribute to this sustained inflation.
Market Skepticism on Inflation
- Despite the Fed lowering rates, the 10-year note has risen, indicating market skepticism about the Fed's inflation narrative.
- Bond markets react to easing but don't believe inflation will decrease as the Fed suggests.
Credit Spreads and Market Dynamics
- The current market dynamic, with easing and rising long-term rates, hasn't been seen since the 1990s.
- This dynamic leads to tight credit spreads, creating opportunities in high-yield and structured credit.