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Monetary Policy Divergence

  • ,  Senior Investment Writer |
  • 03 Jul 2023

central banks

Credit markets in a tight spot - again

After the Global Financial Crisis, central banks were the only game in town. They remained so for…well, they still are. Whatever the major central banks decide to do impacts all asset classes. As monetary policy begins to diverge between key economies, investors (especially in the credit space) are looking at where is best to allocate capital efficiently. This collection provides investors with the latest insights into monetary policy and fixed income sectors.

Monetary Policies Diverge as Inflation Poses Unique Challenges (CME Group)

Across key economies, central banks' policies are no longer in sync. This means a world of volatility for investors, especially those focused on credit markets.

Credit Squeeze from Distress and Dislocations to Steep Discounts (PGIM)

As monetary policy regimes are changing, credit conditions remain tight for certain markets. This represents an opportunity for allocators with patient capital.

Reached The Peak in Interest Rates? (Northern Trust Asset Management)

After a 5% move in the Fed funds rate in just over a year, it appears that we have finally reached the peak policy rate for this cycle in the U.S. - or is it maybe just a plateau?

EM Local Debt: The Stars May Soon Be Aligning (MFS)

For compliance reasons, this paper is only accessible in certain geographies

The current monetary policy decisions made by the world's major central banks are beneficial for emerging market debt.

Two Former Fed Leaders Decode Central Banks: Parts 1 & 2 (PIMCO)

For compliance reasons, this paper is only accessible in the UK & Europe

Former Fed chairman Dr. Ben Bernanke and Dr. Richard Clarida, a former Fed vice chairman offer their views on the potential path for U.S. monetary policy.

Inside The Fed's Dilemma (American Century Investments)

Can the U.S. avoid a recession? This remains the key question for investors. However, short-term predictions shouldn't be relayed upon too much.

A Most Hawkish Hike By The ECB (PGIM Fixed Income)

The recent ECB rate hike and its confirmation of a faster balance sheet reduction were in line with most investors’ expectations.

China’s Weak Borrowing and Central Bank Challenges (Macrobond)

For 2024, most of the policy makers at the U.S. Federal Reserve are predicting higher rates than they were three months ago. What does this mean for credit investors?

Is The Fed Rate-Hike Pause Still Likely? (Lombard Odier IM)

For compliance reasons, this paper is only accessible in certain geographies

Real rates have risen everywhere. This has happened at a time when the Fed was communicating its plans for a pause in its rate hike cycle.

The Key Message In Australia's And Malaysia's Surprise Rate Hikes (Manulife IM)

For compliance reasons, this paper is only accessible in certain geographies

The market may need to adjust to the idea that central banks could be much more comfortable with the concept of financial instability than in the past years.