Kathy Jones: The Bull Case For Bonds, And The Need For “Caution” on Private Credit & Leveraged Loans

Kathy Jones, Chief Fixed Income Strategist at Schwab, joins Forward Guidance to share her outlook on interest rates, credit spreads, the economy, and the Federal Reserve. Filmed on December 5, 2023.

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Timestamps:

(00:00) Introduction

(07:45) Inverted Yield Curve Is Here To Stay

(10:01) Term Premia Will Decline

(14:12) Bond Market Does Not Always Track Nominal Growth

(17:21) Can't Rule Out That This Is A Counter-Trend Rally

(20:56) How Does Bond Supply Affect Price?

(29:02) The Days Of Quantitative Tightening (QT) May Be Numbered

(31:33) Mortgage-Backed Securities (MBS)

(34:09) Investment Grade (IG) Corporate Bonds

(37:22) We Are Not Enthusiastic About CLOs and Private Credit

(46:40) Sentiment and Positioning In Fixed Income

(48:50) Views on Europe and Japan

(53:32) Bull Case For The Dollar

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Disclaimer: Nothing discussed on Forward Guidance should be considered as investment advice. Please always do your own research & speak to a financial advisor before thinking about, thinking about putting your money into these crazy markets.