Walking the Risk Tightrope - Title Image

Walking the Risk Tightrope

Fixed-Income Outlook: Current conditions could persist for some time, but with a possible recession approximately two years away, the time for caution is approaching.

February 21, 2018


Fixed Income Outlook video

Adam Bloch and Brian Smedley share insights from the First Quarter Fixed-Income Outlook


Fixed-Income Outlook

First Quarter 2018

Report Summary

Fixed-income markets have been walking a risk tightrope for several quarters. Bonds in most sectors are trading above par, yields are historically low, and spreads are near or below pre-crisis levels. The best that a bond investor can reasonably hope for in this market is to earn the coupon, while principal is at risk from an active Federal Reserve, the looming increase in Treasury supply, geopolitical risk, and any credit deterioration. Current conditions could persist for some time—economic growth is accelerating, monetary policy is not overly restrictive, and optimism is high—but history has shown that with a recession approximately two years away, the time for caution is approaching.

 
 
Important Notices and Disclosures

Investing involves risk, including the possible loss of principal. This material is distributed or presented for informational or educational purposes only and should not be considered a recommendation of any particular security, strategy or investment product, or as investing advice of any kind. This material is not provided in a fiduciary capacity, may not be relied upon for or in connection with the making of investment decisions, and does not constitute a solicitation of an offer to buy or sell securities. The content contained herein is not intended to be and should not be construed as legal or tax advice and/or a legal opinion. Always consult a financial, tax and/or legal professional regarding your specific situation.

This material contains opinions of the author or speaker, but not necessarily those of Guggenheim Partners or its subsidiaries. The opinions contained herein are subject to change without notice. Forward looking statements, estimates, and certain information contained herein are based upon proprietary and non-proprietary research and other sources. Information contained herein has been obtained from sources believed to be reliable, but are not assured as to accuracy. No part of this material may be reproduced or referred to in any form, without express written permission of Guggenheim Partners, LLC. There is neither representation nor warranty as to the current accuracy of, nor liability for, decisions based on such information. Past performance is not indicative of future results.

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VIDEOS & PODCASTS

Market Outlook 

First Quarter 2022 Market Outlook

Maria Giraldo, CFA, Managing Director, Investment Research, and Evan Serdensky, Director, Portfolio Management, provide our macro and markets outlook.

Macro Markets Podcast 

Macro Markets Podcast Episode 13: The Fed, Credit Quality, and Bank Loans

U.S. Economist Matt Bush analyzes the latest Fed announcement and labor and inflation data, Investment Strategist Maria Giraldo discusses credit risk while the Fed tightens, and Managing Director Chris Keywork updates on the bank loan market.