Tight money: Banks feeling the squeeze of higher rates

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2024-03-31
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The views expressed are those of the authors at the time of writing. Other teams may hold different views and make different investment decisions. The value of your investment may become worth more or less than at the time of original investment. While any third-party data used is considered reliable, its accuracy is not guaranteed. For professional, institutional, or accredited investors only.

Recent high-profile bank failures have raised concerns about contagion risk across the banking sector and triggered global market volatility. Some observers are bracing for a systemic liquidity crisis and potential “feed-through” damage to the broader economy. To help prevent that scenario and boost public confidence, the Fed and the FDIC have taken decisive steps, including the launch of new liquidity facilities. 

The situation remains highly fluid and continues to evolve rapidly, with risks and outcomes still uncertain. To help you understand and navigate this landscape, we have compiled this curated collection of timely insights from our experts.

Our investment professionals actively share research and challenge one another’s views, creating a diverse marketplace of ideas. They decide independently how to draw on those unique perspectives to sharpen their investment decisions, unconstrained by any single “house view.”

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How to nurture a growth mindset in a higher-yielding landscape

In a higher-yield world, can fixed income deliver meaningful growth? John Mullins, Supriya Menon and Alex King explore how high-yield bonds may offer a powerful opportunity for growth - as well as a cushion against uncertainty.

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12 min
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2025-03-31
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The shifting liquidity landscape: What’s at stake?

The beginning of the end could be in sight for the Federal Reserve’s quantitative tightening (QT) program. US Macro Strategist Juhi Dhawan considers the Fed's next steps and what they could mean for banks, liquidity, and markets broadly.

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Quick Take
2025-01-31
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Financials amid rising dispersion

We explore why we believe dispersion across stocks, sectors, and geographies is supporting numerous secular themes in long/short investing in financials.

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2024-09-30
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US regional banking sector update

We explore how banking regulation and legislation could impact US regional banks, including highlighting the potential for M&A activity and for dispersion to drive long/short opportunities.

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Article
2024-08-31
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State of the credit markets: Does cash rule everything around us?

Fixed Income Portfolio Manager Brij Khurana outlines the state of the credit market today, compares historical periods of quantitative easing, and warns credit investors of cash scarcity in the near future. 

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Quick Take
2024-06-30
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FX outlook: Is USD exceptionalism withering away with the Fed hiking cycle nearing an end?

Discover the status of the USD today, learn where the greenback may be headed going forward, and understand why.

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Quick Take
2024-01-31
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Private credit in a new regime 

We explore how a shifting macro backdrop, ongoing banking crisis, and evolving competitive dynamics may create opportunities across private credit markets. 

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Article
2024-06-30
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Inflation loosens its grip, but bank turmoil could put the squeeze on US growth

US Macro Strategist Juhi Dhawan weighs the benefits of disinflation for consumers and companies against the risks of a credit crunch brought on by the recent bank crisis.

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Article
2024-05-31
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Global high yield: Attractive entry points could soon emerge

Fixed Income Portfolio Manager Konstantin Leidman shares his outlook for high-yield fixed income for the rest of this year and beyond.

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2024-06-30
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Credit market outlook: Expect greater opportunities in back half of 2023

Against a backdrop of elevated recession risks and banking-sector stress, Fixed Income Portfolio Manager Rob Burn identifies relative-value sector opportunities in the credit market.

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2024-06-30
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Did the Fed just make a policy error?

Did the Fed just make a policy error? All things considered, Fixed Income Portfolio Manager Jeremy Forster thinks the answer is yes. Learn why and what the implications could be.

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2024-05-31
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How do bank failures impact fintech?

Global Industry Analyst Matt Ross analyzes the ways in which recent US bank failures could impact the fintech sector in public and private markets.

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Quick Take
2024-04-30
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Three macro assumptions that could be just plain wrong

Fixed Income Portfolio Manager Brij Khurana offers his non-consensus take on three entrenched, but potentially flawed, beliefs in today's market environment.

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2024-04-30
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Commercial real estate: Seeking shelter from the storm 

Finding potential opportunities in commercial mortgage-backed securities these days is all about knowing where to look, says Fixed Income Credit Analyst Carolyn Natale.

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2024-04-30
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Lessons from 2008: Stress testing portfolios in today’s market

While very different from 2008, the current market environment makes a strong case for portfolio stress testing. Gregg Thomas, Co-Head of Investment Strategy, offers suggestions for improving the process, including assessing factor positioning and reducing recency bias.

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Quick Take
2024-04-30
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US banking system: Three pressing questions

Equity Strategist Andrew Heiskell asks three questions investors ought to ask when it comes to the recent US banking system volatility.

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2024-04-30
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High-yield bonds: Too early to get aggressive?

Our high-yield team suggests a somewhat defensive risk posture for now but expects opportunities to take on greater risk to arise later this year.

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Quick Take
2024-04-30
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Will higher rates sap US consumer spending?

Higher interest rates have increased borrowing costs. Could a consumer-led US recession be looming? Fixed Income Portfolio Manager Kyra Fecteau sees three factors that may help mitigate the impact.

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2024-03-31
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Private placement amid today’s financial distress

We explore how today's challenging environment impacts private credit markets, including its effects on spreads, issuance, and terms.

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2024-03-31
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Financial stability versus inflation: The Fed’s balancing act has gotten much trickier

The Fed’s policy calculus has clearly changed somewhat over the past few weeks but the central bank may not be done hiking rates just yet, says Fixed Income Portfolio Manager Jeremy Forster. 

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2024-03-31
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Macro risks to watch in this rapidly oscillating global cycle

Macro Strategist John Butler explores the two key questions he believes macro investors should focus on in the current volatile environment.

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2024-03-31
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Securitized assets: Caught in the storm but with scattered bright spots

Securitized assets have been on the front lines of the ongoing turmoil in the banking sector, but not all securitized subsectors appear equally vulnerable.

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2024-03-31
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Understanding the US banking sector shake-up

Investment Communications Managers Jitu Naidu and Adam Norman detail recent US bank failures and analyze the implications. (Published 15 March 2023)

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2024-03-31
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On to the next crisis: Glimpsing a post-SVB world

Amid the turmoil in the US banking sector, Global Investment Strategist Nanette Abuhoff Jacobson suggests investors consider pivoting to a “risk-management mode” that favors higher-quality assets. (Published 14 March 2023)

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2024-03-31
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SVB collapse: What are the implications?

Multi-Asset Strategist Supriya Menon shares her latest perspectives on the collapse of Silicon Valley Bank Financial Group (SVB) and the unfolding implications for investors. (Published 14 March 2023)

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2024-03-31
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Financials and fintech

The fintech revolution is just beginning. Explore the full potential of fintech innovation across public and private markets.

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2024-12-31
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