We open another quarterly commentary with a discussion of just how bad the quarter was for fixed income markets. At the same time, however, a host of metrics suggest that many fixed income valuations are as attractive as they have been in several years. While we think caution and patience are the operative words in the spread sectors, we note some extreme dollar price drops given the movement in both rates and risk premia over the course of 2022.
As we close what has been among the most tumultuous quarters in fixed income history, we are struck by the fact that we are about to discuss interest rate moves and total returns of historic magnitude. Unfortunately, the past two years have led us to utter similar statements rather often.
As we contemplate fixed income markets in 2021 and what is in store for 2022, it seems clear an inflection point is upon us. We have spent a large amount of the past few commentaries discussing inflation and the implications …
As we enter the home stretch of 2021, we are struck by the notion that economic conditions might actually make fixed income interesting again! Coming from a market practitioner, this sentiment is a bit tongue-in-cheek …
We began last quarter’s commentary by discussing the historical context that put the first quarter performance in the history books as one of the most negative quarters for total return on record given the violent interest rate move.
