All the Capital

After years of strict COVID lockdowns, China's domestic consumer economy is rapidly re-opening. Meanwhile, global manufacturing—normally an area of Chinese dominance—is being challenged by tighter credit conditions after years of progressive central bank hawkishness. In addition, the country still finds itself in the global geopolitical crosshairs as highly restrictive policies against China remain.

In this episode of All the Creditâ, PGIM Fixed Income's Gerwin Bell, PhD, Lead Economist for Asia, discusses China's re-opening and how it could be different from recoveries from past decades. Gerwin also provides his 2023 GDP and inflation forecasts for China, assesses the country's policy initiatives and what they could mean for its interest rates and currency, and shares his long-term growth outlook.

Michael Roper, CFA, European Investment Grade Corporate Bond Portfolio Manager, joins as co-host for this timely discussion.

Recorded on April 24, 2023.

Recent global banking failures shook investors and markets alike, leaving many wondering if we're witnessing a repeat of the 2008 global financial crisis.

In this episode of All the Credit®, Mick Meyler, Head of Developed Market Rates, and David Jiang, U.S. Investment Grade Credit Research Analyst, review the events of this latest crisis, discuss the potential for more bank runs, outline potential regulatory responses, and assess the impacts on bank earnings and credit fundamentals. The duo also unpacks the recent swings in interest rates and central bank policy expectations, attempts to measure the impact of now-tighter credit conditions, and more.

Lindsay Rosner, CFA, Multi-Sector Portfolio Manager, joins this episode as a special co-host and provides a summary of our portfolio positioning, particularly in the financial sector, while also accounting for heightened recession risk.

Recorded on March 24, 2023.

A confluence of higher debt levels, tightening central bank policies, and weakening growth are raising red flags around borrower credit quality as signs of financial strain are beginning to emerge. Against this backdrop and as a part of our integrated credit research processes, we remain on the lookout for potential problems across corporate borrowers, consumers, and commercial real estate, both in the near and long term.

Listen to this episode of PGIM Fixed Income's All the Credit® podcast as Brian Barnhurst, CFA, Co-Head of Credit Research, and Gary Horbacz, CFA, Head of Securitized Products Research, share their insights on credit fundamental trends and vulnerabilities across the asset class, along with outlooks on defaults and loss expectations.

Recorded on February 23, 2023.

The residential real estate market directly or indirectly impacts everyone. After all, everyone is born short a house. Home prices and construction activity also largely impact economic growth, wealth, inflation, and, for fixed income investors, residential mortgage-backed securities (RMBS). With the market suddenly in a downturn, should investors be prepared for lower house prices and rents? Declines in home construction and sales? Increased delinquencies and defaults on mortgages?

In this episode of All the Credit®, Kaustub Samant, Head of Mortgage Credit Research at PGIM Fixed Income, reviews the current state of the residential real estate market, along with the recent history of home price appreciation (HPA) and changes in rental rates. Mr. Samant examines trends in the market and affordability issues, and the looming decline of residential prices and rents. We also discuss implications for GDP and inflation, mortgage default vulnerabilities, and shifts we've made within the capital structure in lieu of changes in the market for mortgage-related fixed income securities.

Recorded on January 12, 2023.

Earlier this year, PGIM Fixed Income developed an inflation indicator tool that uses various economic variables to segregate the supply factors that explain the change in inflation, from those associated with demand. The end result helps us gain insight into the future direction of core goods inflation. On this episode of All the Credit®, Guillermo Felices, PhD, Global Investment Strategist, explains our proprietary inflation model and reviews the findings. Guillermo also:

• provides an update on the direction and level of inflation that we're expecting over the next year;
• delves into the policy implications and highlights the macroeconomic scenarios we envision for 2023; and
• shares our views on the level of interest rates in each of these potential scenarios.

Recorded on December 9, 2022.

For the first time in decades, long-term interest rates have broken out of their steady downtrend with recent spikes. Is this a temporary irregularity? Or has the rate environment reverted to a paradigm of sustained higher yields and returns from bonds? In this episode, Robert Tipp, CFA, examines how we arrived at "low for long," and why it's given way to generational highs in growth, inflation, and interest rates, creating a strategic buying opportunity in fixed income. Robert also provides his thoughts on potential interest rate paths and soft versus hard landing possibilities in 2023.

Recorded on November 17, 2022.

On this special edition of All the Credit®, Mike Collins hands the mic to PGIM Fixed Income's Co-Chief Investment Officer, Greg Peters, and newly appointed Chief Global Economist, Daleep Singh, to discuss:

• the current macro backdrop;
• central bank policy and response;
• impacts to the fixed income market;
• possible macro scenarios heading into 2023 and trends we're watching;
• opportunities in fixed income; and
• how our investment process aims to help our clients thrive through this period of heightened risk and uncertainty.

Recorded on October 12, 2022.

With the recent announcement of a major student loan forgiveness program in the U.S., we dissect the program and its implications for fixed income investors. PGIM Fixed Income's Florence Chan, Head of ABS Research, and Scott Motta, of the Securitized Products portfolio team, are here to sort through all the details, including:

• a brief history of student loans in the U.S.;
• details on the new loan forgiveness program;
• thoughts on the economic and inflationary impact of the program;
• characteristics of the student loan asset back securities (SLABS) market; and
• how PGIM Fixed Income views and has been positioning ourselves within the SLABS market.

Recorded on September 23, 2022.

In a prior episode, we examined the broad economic implications of the European energy crisis as a result of Russia's invasion of Ukraine and the related effects of the conflict. And with the winter season fast approaching, we wanted to provide an update on the region's energy situation. We've called on Katharine Neiss, PhD, Chief European Economist, and Magdalena Polan, Lead Economist for major EM economies in Central EU and the Middle East, to summarize the current state of affairs in Europe, detail the current and possible alternative sources of energy for the region, and highlight the areas in which access or reliance on Russian oil and gas has ceased. The duo also hones in on key distinctions in the energy situation across Europe, provides their assessment of the region's outlook for this winter and the next, and hypothesizes how the ongoing energy transformation might ultimately shape Europe.

Recorded on August 23, 2022.

After a challenging first half of the year for fixed income, we see reason for optimism ahead for a variety of sectors. PGIM Fixed Income Multi-sector Portfolio Manager, Lindsay Rosner, CFA, and Senior Portfolio Manager, Mike Collins, CFA, examine the state of individual fixed income sectors and share their top active management, relative-value ideas. We're talking "all the opportunities" in this episode of All the Credit®!

Recorded on August 2, 2022.