Fixed Income
MacroQuant recommends a slight underweight position in equities, and favors a below-benchmark duration stance in fixed-income portfolios. The model is very positive on the US dollar, neutral on gold, constructive on copper, and very bullish on oil.
Despite today’s hold, the bar for a rate hike in September remains low and contingent on the next two core CPI reports.
Most Fed and pundit assessments of inflation expectations are overly narrow, focusing too much on long-term market-based measures. We favor a more qualitative approach that asks whether the inflation outlook is influencing household and business decision making.
Goldilocks, with fault lines underneath. Our first joint FICC outlook lays out where growth, inflation, and policy are headed this quarter and where the calm could crack.
We review our Model Bond Portfolio performance for Q2 and look ahead as fixed income markets move beyond the US-Iran conflict, which is finding its kinetic equilibrium. Valuations and growth differentials are moving against continued US Treasury outperformance.
