FICC Focus

If the economy evolves a certain way, the Federal Reserve isn’t far from cutting rates more than the market thinks, says Wellington Management Portfolio Manager Brij Khurana. Khurana joins host and Bloomberg Intelligence Chief US Interest-Rate Strategist Ira Jersey and senior Canada and US rate strategy associate Will Hoffman to discuss the current dynamics and trends across fixed-income markets. The trio examines the shifts in the US inflation outlook and subsequent market pricing for Fed policy action, as well as the state of the domestic labor market. They highlight the potential shifts in fiscal policy under the new administration and the changes to nominal growth and wage expectations under several scenarios.

The Macro Matters podcast is part of BI’s FICC Focus series.

In his 35 years on Wall Street, Moelis’ Global Co-Head of Capital Structure Advisory Bill Derrough hasn’t seen a rescue-financing environment as robust as today, “where we [can] run so many parallel processes at the same time.” As one of the key bankers behind Hertz’s successful bankruptcy auction and American Airlines’ game-changing Chapter 11 exit merger, Bill shares with Bloomberg Intelligence’s Noel Hebert and Phil Brendel some “war stories” and his insights on trends in liability-management exercises, the rise of cooperation agreements and developing creative restructuring solutions (6:00). Prior to that, Noel and Phil discuss the high yield market’s historically-tight spreads and 4.5-year respite from a surge in distressed inventory. The podcast concludes with BI’s Negisa Balluku joining Noel and Phil for a round-table discussion covering Serta Simmons’ impact on equitable mootness, Hertz, Yellow Corp., Spirit Airlines, GOL Airlines and Franchise Group (1:30:00).

High yield credit had a strong 2024 as yields rallied and spreads followed, while defaults didn’t blow up as feared. In Europe, the index default rate stands at a low 2.5% and the US at 1.1%, while the share of stressed and distressed bonds drastically came down. Will 1Q sustain those gains, and why? Mahesh Bhimalingam, Bloomberg Intelligence’s chief European credit strategist, discusses the results of the team’s 1Q25 High Yield Survey, along with the market outlook, with Marco Salcoacci, senior high yield fund manager at Union Investments. The report covers investor positioning, sentiment, key return drivers, default and supply forecasts and relative-value opinions by geography, rating and sector. They assess how deeply high yield prospects differ between Europe and the US.

The pound may be getting a bounce from the optimism that the UK could dodge President Donald Trump’s tariffs as trade headlines roil global markets, but not all is rosy for the British currency on the domestic cyclical front. In this episode of FX Moment, Bloomberg Intelligence’s chief G-10 FX strategist Audrey Childe-Freeman and Jordan Rochester, head of FICC strategy for EMEA at Mizuho Bank, discuss the pound’s position vs. peers on the tariff narrative front, UK’s near-term economic prospects and the Bank of England monetary policy outlook ahead of the Feb. 6 meeting. They also look beyond the positive dollar narrative to identify strong G-10 FX views for 1Q, with the bullish cyclical and structural yen case in the limelight at a time when defensive currency positioning makes sense.

Markets may be having to assess more than the normal number of cross currents in the economy right now, with a new US administration, stock volatility and a host of geopolitical developments. On this episode of the Bloomberg Intelligence Macro Matters podcast, host and BI chief US rates strategist Ira Jersey is joined by Frank Rose, president of Chevalier Strategic Advisors, to discuss the primary geopolitical risks the US faces in coming years. They also review key appointees from the Trump administration and their potential influence on international policy, while exploring the threats stemming from Eurasia, with a focus on Russia-China relations. Jersey is also joined by BI’s Chief European rates strategist Huw Worthington and senior rates strategy associate Will Hoffman. They examine the results of the recent Bank of Canada, Federal Reserve and European Central Bank meetings, and what those may mean for the path of monetary and yield curves.

European credit markets have gone through a significant shift in market dynamics over the past five years, as low-interest-rate debt is coming due and traditional sources of financing retreat. Bloomberg Intelligence analysts Noel Hebert and Sam Geier are joined by Arini Capital Management CIO and Founder Hamza Lemssouguer on this episode of Credit Crunch to discuss how Arini is capitalizing on structural inefficiencies in high yield credit markets. The conversation gets into the founding of the firm and their approach to running a long/short book before touching on the extension into CLOs, dispersion despite tight spreads and the impact of shifting costs of capital.

The Credit Crunch podcast is part of BI’s FICC Focus series. Listen on Apple Podcasts and Spotify.

It may be a good year for the volatility market as pro-business government policies and elevated equity exposure that drive market overshoots could see high reactivity on the downside. In this edition of the All Options Considered podcast, BI’s Chief Global Derivatives Strategist Tanvir Sandhu gives an update on market volatility and is joined by Catherine Clay, Global Head of Derivatives at Cboe. They discuss cross-asset volatility, flows and crypto options market.

As others head for the exit from the commercial real estate (CRE) sector, Benefit Street Partners President Richard Byrne views this as the perfect time to fill the funding void that could arise. Byrne joins hosts Noel Hebert and Sam Geier of Bloomberg Intelligence on Credit Crunch to discuss the budding opportunity in CRE as a result of higher interest rates. The discussion gets into CRE debt vs equity, an impending CRE maturity wall, the multifamily sweet spot, relative value within direct lending and much more. Credit Crunch is part of the FICC Focus podcast.

With expectations for future tax cuts softening and muni yields levels remaining attractive, greater buying opportunities may be on the horizon in munis. In this episode of Bloomberg Intelligence’s Masters of the Muniverse podcast, hosts Eric Kazatsky and Karen Altamirano are joined by Mark Paris, chief investment officer and head of Municipals at Invesco. They discuss why the outlook on muniland looks bright, and why muni issuers are well positioned to manage future policy shifts.

The two standout risks with the new US administration are tariffs and immigration policy, Kathy Jones, chief fixed-income strategist at Charles Schwab, says in the latest episode of Bloomberg Intelligence’s Macro Matters podcast. Jones is joined by host and BI chief US rates strategist Ira Jersey to discuss the outlook for Treasury markets and the economy. The pair discuss the recent drivers of yields across the curve, as well as inflation and potential fiscal risks to growth as the new administration enters office. They also hit on government debt and deficits, and how these influence bond market valuations.

The Macro Matters podcast is part of BI’s FICC Focus series.