FICC Focus BlackRock’s Brownback on Global Fixed Income: Macro Matters
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Jul 31, 2025 Russ Brownback, co-portfolio manager at BlackRock, shares his expertise on global fixed income. He discusses the U.S. dollar's enduring status as the world's reserve currency and identifies promising yield opportunities in both U.S. and European markets. Brownback highlights a significant liquidity disparity in the U.S. economy, emphasizing the need for reinvestment amid impressive cash generation. He also suggests strategies to leverage elevated volatility in fixed-income markets, advocating for the sale of options to enhance returns.
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Dollar's Enduring Reserve Role
- The dollar remains the global reserve currency due to its entrenched role in trade and finance.
- U.S. exceptionalism offers superior returns and opportunities attracting global capital.
Dollar Strength Amid Volatility
- Despite recent volatility, the dollar remains strong on a long-term basis.
- Foreign investors may hedge currency risk while maintaining U.S. asset exposure amid political pressures on the dollar.
Fundamentals Drive Yield Curves
- Individual country fundamentals chiefly drive yields in U.S., Japan, Europe, and emerging markets.
- The U.S. yield curve re-steepened from inversion, reflecting Fed policy front-end anchoring and nominal GDP growth at the back end.